The Psychology of Credit Cards and Why They're Evil
Written By: Nick Nguyen | Read full profile
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They tell you that if you eat at restaurants a lot, you can get 3% cashback, or 5% cashback on your gas. It almost sounds too good to be true right? Well to a certain extent, it is! Your credit card makes you more likely to spend money just for that sweet cashback. I mean, I’m always tempted to buy something because of how much I can “save.”
But imagine now your parents gave you a crisp $100 bill. That feeling of giving the beautiful green Benjamin to a cashier hurts. It’s like someone just punched you in the gut! There’s something about the psychology of giving someone cash and getting less or even worse, nothing, back vs. giving plastic and always getting it back. You’re literally emptying your pocket when you use cash.
Now you don’t even have to let go of your credit card!
This is how the credit card companies get you! Whenever I get a 5-15% coupon on top of my regular card’s cashback, I’ve got to fight the urge to suddenly go out and spend money on stuff I don’t need. Remember, things will always go on sale and swiping a credit card is way too easy.
They got us with 10% back from McDonalds!
And even if you’re like “oh, if I don’t like it, I’ll just return it!”
...well there’s usually too much friction involved with returning the stuff you bought! You’ll have to package it, drive to a drop off place, wait in line, etc. They’ve trapped you into purchasing the item and potentially running up your credit card debt, so they can earn some money off your interest! It’s tough
So if you’re looking to save money for your next vacay, build an emergency fund, or just decrease your spending so you’re not broke, maybe having a credit card isn’t the best move unless you’re very disciplined.
Check out my follow-up post here about how I use “being cheap” to fight the evil urges of credit cards!
**Nguyening Lifestyles is not a financial service professional and is not liable for any decisions you make regarding credit cards or managing your debt. We are simply here to entertain and provide content for educational purposes only. Therefore, we are not liable in any capacity for any actions that may result from reading this post. Proceed with using any type of credit card, credit line, debt, credit reporting company, etc. with caution.
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