Do you ever feel like you spend too much money when you use your credit card? Studies have found that people spend more on cards than they do with cash. This can lead to a lot of potential debt troubles, especially since many cards have high-interest rates.
One reason for this is that you’re not as conscious of the amount of money you are spending. For example, imagine that you have $2,000 in credit card bills at the end of every month. If you buy something extra for $100, it doesn’t seem like a big deal to have a $2,100 bill instead. But if you have to hand someone a $100 bill, you’re much more conscious of how much money you give them for that product or service.
Putting off the payments
Another reason is that using a credit card pushes those payments until the end of the month. You’re not actually spending money. You’re borrowing money. You agree to pay it by the time the credit card bills come due.
This can lead to a lot of mental negotiating, which is sometimes done unintentionally. Someone may know they don’t have the money to purchase an item right then. They may also not have any idea how they will come up with that extra money by the end of the month. But, if they want the item, it’s much easier to rationalize it by assuming you’ll figure out how to take care of the bills in the future. When that doesn’t happen, then you start paying high levels of interest, and the debt begins to spiral out of control.
This is just one reason that credit cards can lead to significant debt problems. People who find themselves in this situation may need to consider bankruptcy and all of the other legal options at their disposal.