How do credit cards manipulate you, or Why do debts grow?

By themselves, credit cards can not be called bad. Some of them may be worse than others, but the main problem is how we use them. And it's not a coincidence that it's credit cards that negatively influence the buying habits of many people. In this article, we will look at some of the reasons why credit cards increase the number of wrong financial decisions. In addition, they indirectly manipulate you and force you to increase debt.

1. Credit cards are very convenient

Recent research has shown that convenience is an important factor. If a person uses cash, he makes far less meaningless purchases. But the use of a credit card becomes painless, because you do not see real money and do not torment yourself with questions if you can afford it. You just do not count the money before buying.

2. They allow you to instantly satisfy all desires

The advantage or, rather, the lack of a credit card is that you can instantly use money that you should not spend. If a person needs to buy food or medicine, a credit card becomes an advantage. But there is a huge flaw. This allows for the first place in the list of priorities to put instant gratification and forget about planning and long-term thinking. The worst example of this behavior are people who use a credit card to carelessly live for several months, and then return their debts all their lives. Fortunately, such examples are quite rare, and most people still manage to stop the desire to spend everything immediately.

3. Credit cards have an absurd interest rate policy

When we think about interest, then, as a rule, we remember the annual, because that's how it happens with a standard loan in the bank. But the charge on the credit card is different from the standard scheme. In exchange for all the amenities they offer, you will have to pay an interest rate that is more than the traditional on average by 20%. But at first glance this is not always possible to notice, since the interest is calculated for a month, not a year. Perhaps 2% a month does not seem to you too high a payment for using a credit card. Of course, this also depends on the bank that gave you the card. In addition, most of them provide for huge fines, if you do not repay the debt on time.

4. Credit cards allow you to spend more than you earn

Getting a loan from a bank is a painful process. You not only need to give a good reason for this, but also prepare a lot of documents. In contrast, credit cards allow you to spend money for no reason. This can lead to the fact that you will start buying clothes (simply because you so wanted), when in fact you do not have the money for this.

5. It is rather problematic to track expenses with a credit card

Perhaps you will argue the opposite. If you are not too lazy to track your expenses every day through the Internet, then in this really there is nothing difficult. But the problem is that it is not so easy to do. If you use cash, you need to first take them off to spend. Thus, the amount of money you spent on is registered, and you can always roughly say what expenses you had this month. But funds taken from a credit card are not recorded in the same way. Even if you go through all the expenses, it will be difficult to say whether you have already spent your last salary or not.

To avoid bankruptcy of customers and guarantee repayment of a loan, many banks conduct a strict policy of credit limits. But, unfortunately, the purpose of creating a credit card is not to make our life more comfortable, but for the owners of banks to make money. So it is unlikely that banks will take further steps to help you more control the daily expenses. Thus, only by taking responsibility, you will be able to change something.