The Psychology of Credit Card Spending

Alt-Text: credit card casinos 


The end of the month is here, and the expenditure has been way more than your anticipation. Many users go through this ordeal after seeing their credit card bills. Blame your brain for this. It makes the experience pleasurable whenever you swipe a credit card to make a purchase.


Cash vs. Credit Card Payment Psychology

Credit cards capitalize on the notion – future payments feel less unpleasant than today’s expenses. A delayed payment system of prepaid cards removes any inhibitions a buyer might have while purchasing. Psychologists call it payment coupling.


Research by the University of Toronto also shows that people willingly spend more for a particular product or service via a prepaid card payment system than cash. 


Imagine you burnt out your bankroll on losing a game at online casinos that accept credit card real money. You’ll instantly add more funds to your account, assuming you’ll make up for the lost bet by the month’s end.


Since money doesn’t directly withdraw from your bank account, it’s less psychologically painful. Simply put, you feel like you need to spend more money. Credit card payment mode induces an insidious effect by reducing the pain of expenses.


On the contrary, giving money out of your hand is a dissatisfying feeling. Hence, people hesitate to spend the same amount with cash but not credit cards. 


Let’s delve into the psychological causes behind people’s overspending habits with prepaid cards.


Overvaluing the Purchase Benefits

Consumers tend to ignore the costs of products when they pay via credit cards. It’s another impact of payment coupling. People will more likely overvalue the benefits of the item bought than its cost. 


For instance, you won’t worry about ordering an expensive prawn dish in a restaurant if you pay via prepaid card. Your focus will only be to relish that delectable meal. However, you’ll see the price of a dish twice on cash payment. You know that being short of money while clearing a check will end in an embarrassing dinner date.


Thus, doing the cost-benefit analysis is difficult when you pay via credit card. 


Creates Rewarding Sensation

The brain can get conditioned to shop more due to the sensory rewards of credit card payment methods. According to the MIT study, paying with credit cards activates the rewards section of the brain. The sensitized brain’s reward networks make you overspend without worrying about high costs or expenses.


Usually, this sensation is missing during cash payments. The reward networks only activate when a person buys cheaper items. 


Impulse Shopping

Stress is a core reason behind your impulsive shopping behavior. It’s as real as stress eating. Whether it’s a long strenuous day at the office or a fight with a loved one, people feel better after shopping with a credit card.


Psychologist Ian Zimmerman noted that shopping may be a way to uplift the mood of many impulse buyers. A buyer will crave to buy the products without considering their high cost or irrelevancy.


To curtail this habit, find the stress triggers that influence your brain to shop and relax. Besides, introspect if your recent purchase is easing your situation anyhow. Most of the time, it’ll only worsen your financial condition.


How to Use Credit Cards Prudently?

Follow these tips to control your spending and credit card debt.


  • Keeping tabs on your daily expenditure is vital to avoiding overexpense using credit cards. So regularly track your card statement and transaction history.
  • Never max out your credit card limit. Experts advise spending less than 30% of the amount of available credit.
  • Buy what you can pay off when your credit card bill is due. It’ll also save you unnecessary interest compounding.
  • Try stress-relieving activities to refrain from impulse shopping.
  • Switch to other payment modes like cash, debit cards, and checks.
  • Have a detailed strategy for the repayment before making further purchases.
  • Turn on alerts so you know you reached your spending limit.
  • Refrain from letting the discounts, rewards, cash back, and loyalty points lure you to buy more.



  1. Do you spend more using credit cards?

Yes, credit card purchases create a psychological impact that changes a person’s spending habits. 


  1. How do credit cards affect our brains and spending?

When a person shops using a credit card, it activates the brain’s reward network. The experience feels rewarding based on studies. This sensory incentivizing system encourages people to make more credit card purchases than they would through cash.


  1. Why should you spend less with your credit card?

Spending more than your available credit will make debt repayment easier. Besides, you can maintain good credit scores and reports when you make limited credit card purchases.


Final Thoughts

The cashless effect increases a person’s willingness to buy and pay more. Indeed, paying with cash every time isn’t feasible in this era. The solution lies in using credit cards responsibly to secure yourself from the debt trap.


After all, nobody would like to receive a bill that could throw their finances off balance.



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