But Still, People Enjoy Buying Something With A Credit Card More

Category: Finance, Credit.

The number one rule when you are choosing a credit card deal is to consider your spending habits.

So it is obvious, that your credit card choice depends on your spending habits. You should always keep in mind where you like to shop, how much balance you usually carry on your plastic and whether you spend enough to qualify for those rewards and cash backs. However, your spending habits are greatly influenced by credit cards. The following experiment was conducted at one of the American universities. Psychological studies have shown that consumer behavior of those using credit is different from those paying with cash. Two groups of people were bidding on the same items. The result of the experiment was quite interesting.

Members of one group could only bid with cash, the others were allowed to bid only with credit cards. Those who could bid with credit cards ended up making bets twice as high as those made by participants paying with cash. In other words, people shopping with credit cards spend twice as much as those shopping cash. That means that every dollar spent with a credit card equals 50 cents spent in cash. Why does this happen? Paying for them is not. Buying things is pleasant.

Usually a consumer tries to find a balance so that the pleasure of having overweighs the pain of paying for it. Of course, you still have to pay for what you have bought. When a credit card holder uses his or her plastic pleasant consumption transaction is disconnected from the unpleasant payment transaction. According to scientific data people dislike paying credit card bills even more than paying parking tickets. Studies have shown that even a credit card logo on a catalogue or a debit card excites people. But still, people enjoy buying something with a credit card more. This is another wonderful way to increase sales and many merchants know that.

Pretty much so. So are credit cards enticing you to overspend? So are credit card- issuers to blame for the increased credit card debt? Even though a consumer seems to spend more with a credit card but most people are able to stop when they know they are about to exceed the limit. Well, that would not be quite fare to say so. And we are not talking about credit card limit, but the limit they have set for themselves, something like' I won' t pay for a pair of shoes more than 100 bucks' .

Rather, high interest rates and fees and those unpleasant credit card bills make consumers stop. Credit cards might make you spend more but they do not force you to overspend. People do not like giving money, especially to banks. Credit card deals can be very beneficial for consumers if used wisely. From this standpoint overspending is more likely to happen when shopping with cash than with a credit card. Of course, they sometimes make you to spend more, especially if you want to get a cash back or earn bonus miles.

You are the only one who can answer the crucial question- to spend, or not to spend. But the decision is always yours.