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How credit cards trick you into spending too much

On Behalf of | Aug 20, 2023 | Bankruptcy

Credit cards are virtually indispensable for most consumers. They offer a great deal of convenience and flexibility when a major expense crops up.

However, credit card companies don’t make money unless you carry a balance. That means they actively use a complex web of psychological tactics that are designed to encourage you to spend more (and more).

Instant gratification: Priceless

If you are old enough to remember Mastercard’s “Priceless” ad campaign, then you probably remember how they made it seem like even the most outrageous expenses were worth the “priceless” moments that they create.

In reality, those ad campaigns were selling:

  • Instant gratification: The lure of instant gratification is strong, and credit card companies work hard to remind people that life is short. That encourages them to spend now and worry about the consequences later.
  • Delayed pain points: When you have to hand over cash or take a big chunk out of your checking account to pay a bill, that hurts right away. Pain from overspending on a credit card often doesn’t kick in until the bills come – up to a month later.
  • Minimum payment deception: That attractive minimum payment that many credit cards offer can ease your concerns about managing your debts. However, only paying the minimum costs you more in interest over time than the initial purchase price.
  • Emotional spending triggers: Credit cards capitalize on emotional triggers such as stress, boredom or excitement to encourage shoppers to spend and spend some more. Shopping can serve as a temporary escape from reality, and using a credit card makes it easier to indulge in “retail therapy” without considering the consequences.
  • Tempting credit limit raises: When credit card companies raise your credit limit for being a good customer, they give the impression that you can afford to spend more. This can quietly influence you to make purchases that are larger than you can comfortably pay off from month to month.

Here’s the reality: Credit cards are a trap. The only people who say otherwise are the credit card companies, and that’s because they are selling you something. If you’ve gotten in over your head with credit cards and other bills, it may be time to discuss your legal debt relief options.