Credit Cards

With the advent of credit cards, people suddenly found they could buy things they had never been able to before, and so the age of consumerism and wasteful spending began.People were now spending a lot more than they could reasonably afford, which led to millions of Americans beoing heavily in debt. It has become a huge problem in recent years, and is somewhat more prolific today because of the current economic condition.

If asked, most Americans will tell you that they have at least one credit card and/or credit card debt. Credit cards offer you the illusion that you have more money than you did previously, which can often lead to people buying more extravagantly. They often buy more than what they need, and suddenly only wear designer clothes and eat at the finest restaurants. There is less accountability with credit cards, which leads to over-spending.

When someone applies for and receives a credit card with a $10,000 limit, it can often feel like it is burning a hole in their pockets. They go out for a normal trip to the store and suddenly realize they have a way to purchase all those things they couldn’t before. Instead of saving for a new pair of shoes or those designer sunglasses, they walk out of the store with four pairs of shoes and the sunglasses, and maybe a few little extras. After all, they have $10,000 now right?

What is so easy to forget in that moment is that credit cards don’t equal cash. Whatever you charge to the card will have to be paid back, as will the very high interest rate. But because nothing has to be paid right then, it is easy to get carried away and buy a lot of things that are not necessary. People purchase something with the belief that they need it, and then justify it by saying they will have more money later. When the bill finally comes in, they realize that maybe they don’t have all the money they thought they were going to, and suddenly the debt starts stacking up.

There seems to be a different mentality with spending money on credit cards then there is with spending physical cash. People tend to become more careful when dealing with cash, and seem to think twice before handing money over for things they don’t need. It can be difficult to hand over a stack of bills knowing that you just put in a tough eight hour work day to earn it. Handing over a piece of plastic with the knowledge that you will be paying for it later can distance a person from the reality of it, which makes wasteful spending much easier.