Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I think psychologically most people will spend more using a credit card. Debit I would question, to me it's mostly like cash. I know I'd spend less if I just had cash in my pocket - there is something about physically handing over cash and seeing it being spent that hammers home the concept of buying stuff. That being said, if you want it, and don't have cash on hand, you're depriving yourself of that item and it's not really the same thing.
That being said CC's come with some good perks. I just used a damage policy on my card for an item I bought back in November. Saved me a $350 repair bill.
Now buying with CC because you don't even have the money to purchase something is completely different.
It is so easy to spend money because of those plastic debit and credit cards. It does not seem like you are spending real money. Especially at places where you don't even have to sign. Just swipe and go.
If you are using credit cards, you don't have to pay for weeks and can spread the payment over a long time if you pay interest.
They say one of the reasons casinos use chips is it does not seem like real money, so it is easier to gamble.
If you had to pull the money out of your wallet and count it out, would you spend less?
For me? No. I correlate a payment to cash regardless how I make it (check cash charge). And while I use a CC for online or shopping I pay it at the end of the month and I don't carry a balance over. So for me it's money regardless how I pay.
I don't use my ATM because there are too many ways to skim the info. So I use a CC.
But there have been studies done and people do tend to spend more when paying by plastic/credit. Handing over cash is a lot tougher to most than paying by credit.
it makes a difference because of leverage. If I'm bad with managing 80k of income, that's bad. If I'm still bad at managing the 80k and throw another 40k of debt on top of it to mismanage, I have a much deeper problem. I'm not sure how it's hard to see how it's easier to spend more money when you're granted additional liquidity that you wouldn't have otherwise even had access to...
so... why are you not sitting your credit limit at a level that isn't "leverage" more than you can handle
Of course that's an option, but not an option that people choose seeing as how credit card debt is in excess of a trillion dollars. You're moving the goalposts to what your original question was. It's easier to spend on a card because it gives you more to spend than you otherwise could. Simple. I mean your second post is basically saying they won't have debt if they don't use debt. No ****.
Me? Less. Others? Yes, I see some that spend more. Generally those that do not avoid interest charges or fees on their credit card purchases. From what I have seen they generally have poor spending and money management skills though I am sure there are some exceptions.
We need to be careful of the 'research' into credit card spending. For example Dave Ramsey and his Ramseyites love to quote a McDonalds study where they saw those with cash paid 42% less than those paying with cash. The Ramseyites conclusion is that people spend more when using credit. My conclusion is that people are more likely to pay by an alternative cash method (credit) when the ring total is higher. That does not necessarily mean they are upgrading their purchases. For me at a food place it simply means I am paying for more people and will use credit to pay even though I usually have the cash sitting in my wallet to cover the charges (if we are talking fast food).
I do it all the time at the grocery store. One day stop on my way home and pick up eggs, milk and bread paying cash. A few days later pickup some hamburger, chicken and rice again paying cash. Then a few weeks later I go to the store and buy all those things at once and pay with credit. Am I spending more? Not by my math. The price per item is the same* (assuming no price increases) and I almost always have that amount of cash to cover the purchase in my wallet at the time of purchase. Using credit did not change my spending rather the ring total changed my payment method.
* Not even touching on the cashback aspect which makes the credit price cheaper. I have yet to find a grocery store or major retailer that offers me a discount for paying cash (other than those that accept cash only).
I always laugh when folks feel they are the only people that don't adhere to normal psychological human nature. NEVER in a million years would they be susceptible to basic human behavior...
It is so easy to spend money because of those plastic debit and credit cards. It does not seem like you are spending real money. Especially at places where you don't even have to sign. Just swipe and go.
If you are using credit cards, you don't have to pay for weeks and can spread the payment over a long time if you pay interest.
They say one of the reasons casinos use chips is it does not seem like real money, so it is easier to gamble.
If you had to pull the money out of your wallet and count it out, would you spend less?
When you get the bills, the money spent on credit cards certain seems real.
When I was younger I foolishly got into a lot of credit card debt. But then decided it had to go so paid them all off by about age 30. For the past 20 years or so, I have only used debit cars. So, a card is just like cash to me.
No, not really, because I pay the whole balance off the very next statement.
That's not what studys have shown. Regardless of how you pay your bill, people spend more using credit cards than cash on hand. We are all susceptible to this common behavior.
Budgeting using the cash envelope method is the best method to control spending one can utilize.
but not an option that people choose seeing as how credit card debt is in excess of a trillion dollars.
Need to be careful of that number as well. I assume that's the number of total credit card debt which hasn't taken out the amount that gets paid off in full when due? Even using the amount that goes unpaid is not enough as some of those accounts are on interest free periods. Be careful of the numbers we get fed.
P.S. Is it really a trillion dollars? I only ask because a quick search on the internet shows Nerd Wallet had it at $779 billion in 2016. Still a large number but again I do not think that takes into consideration the amount that gets paid off in full each month.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
