04/06/2022
Is using a credit card really all that bad? But I pay it off every month!
Here’s a couple things to reflect on and consider.
1. Consumers will spend up to 83% more when using a card vs cash. (https://shiftprocessing.com/cash-vs-credit-card-spending-statistics/)
2. When people use credit cards it doesn’t hurt as much as using cash. You hand someone your card and they give it back (same thing with debit cards essentially). However, you know money is coming directly out of your bank account when using a debit card. The brain perceives the transaction differently when you hand someone cash and get less cash back.
3. Using credit cards means you don’t have to plan and set goals for your spending. Having a plan and saving up for a goal, something you want to purchase, can be a huge motivator to spend money wisely, and it’s very rewarding! But, if you can put it on a card and pay later then you no longer need to follow that plan.
4. Look at the size of your house and look at the size of credit card company buildings and banks. Now, tell me who is making a better decision? The bank or credit card company who has a building worth hundreds of millions of dollars? Or your $300,000 home?
5. Do the math on “cash back.” Here’s an example. Let’s say you get 2% cash back on your purchases.
Spend $1,000 and you get $20
Spend $10,000 and you get $200
Spend $100,000 and you get $2,000
This isn’t a “get rich/wealthy” equation. Personally, I don’t need to spend $100,000 dollars using a credit card throughout the years so I can get $2,000 from the bank. That math does not add up to me.
How are American consumers spending their money these days? We break down cash vs credit card spending statistics to show how consumers make purchases.