Credit cards affect people psychologically

On Behalf of | May 25, 2023 | Consumer Credit |

People in Florida who find themselves filing for bankruptcy often cite credit card debt as a primary reason for their financial troubles. Even those who haven’t yet filed for bankruptcy may have an extensive amount of debt across multiple cards. When combined with other issues, such as mortgage loans, car loans, student loans, medical debt and the like, credit card debt often gets overwhelming.

Many times, outsiders will simply say that people should make wise decisions with their credit cards, and they shouldn’t spend so much money. But the fact of the matter is that credit cards themselves are playing a psychological trick on people. They are designed to get you to spend more money than you would otherwise, and studies have found that this is exactly what they do. People are more prone to overspending when using a card than when using cash.

Why does this happen?

One reason that this happens is because a credit card makes it easy to make a purchase. If you always have the card on you, you don’t have to go to the bank. You don’t have to write a check. You don’t have to have enough cash on hand. As soon as you feel that impulse to make a purchase, you can just do it.

A similar issue is that people using credit cards often feel like they are spending “tomorrow’s money.” They know that they’re not spending real money. They are just agreeing to a certain level of debt, and they tell themselves they’ll be able to pay it back. This may or may not be true, but that’s how credit cards make you think – and it’s something that would be impossible if you were spending cash and you couldn’t spend more than you had.

Finally, credit cards have very high interest rates. Missing payments can inspire different fees. There are a lot of additional costs that go along with using a credit card that need to be considered, which can ultimately mean that you’re spending even more than you agreed to spend at the point of purchase.

Working through bankruptcy

If you’re dealing with overwhelming debt, you may want to use bankruptcy as a way to alleviate that pressure. Seek legal guidance to learn more about your options.