4 Reasons Why We Are Spending More on Credit Cards

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It’s typical human behavior that we are more likely to be cautious when spending cash than we do while using a credit card. This is because cash is tangible. When we hand it over at the cash counter it’s a visible sign of a depleted balance. With credit cards we look at the bill only at the end of the month, so it seems like deferred spends. Online shopping too has made it so convenient for us to type in the numbers and checkout via credit card payment, ensuring instant gratification and delayed payments.

So yes, there are a lot of reasons why we tend to spend more when using a credit card.


It’s so easy to use

Be it clothes, accessories, furniture to adore your home or office, smartphones etc. we have almost everything and anything available over online marketplaces and websites. The impulse to keep adding products to the cart is difficult to avoid.


The pain of payment

While spending cash, the gain and the pain go hand in hand. The gains from a new acquisition and the pain of parting with your hard earned cash. With a credit card we can focus exclusively on the delights of the new purchase. The bill only comes in at the end of the billing cycle.


Rewards on Spending

Besides, credit card companies offer reward points to encourage more and regular use of their credit cards. This naturally makes it very tempting to spend more under the illusion of earning some freebies as well.


EMI Option

Credit card companies allow you to opt for EMI payments and therefore further extend your credit period. Keep in mind though that choosing the EMI option means end up paying more in return as these companies charge interest rates of approximately 2-2.5% to lend via EMI. This is the highway to Credit Card debt.

Remember though that it is important to not default on credit card payments as they do not reflect well on your credit report


14 thoughts on “4 Reasons Why We Are Spending More on Credit Cards

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