Michael D. Hart, P.C.

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How credit cards lure people into spending more than they can afford

On Behalf of | Jan 20, 2021 | Bankruptcy |

Credit card debt is not the sole cause of consumer bankruptcies, nor even the most common reason. That honor goes to medical debt. But credit card debt does play a significant role.

Many people who find themselves facing excessive debt are surprised by their own level of credit card debt and wonder how they spent so much. As it turns out, using credit cards plays a psychological trick on you that can increase your total spending. 

The money doesn’t feel real

The root of the issue is that money charged to a credit card doesn’t feel as real as physical money that you hold in your hand. And, as many experts point out, it’s not. It’s borrowed money. It only becomes real spending when you have to pay back what you borrowed. 

This makes it easier for you to make impulse purchases. If you had to go to an ATM, withdraw $200, take it to the store, and hand it to the cashier, you’d have a lot of chances to reconsider. You’d really feel how much of your paycheck was going into that one purchase. This could cause you to spend less and skip purchases. 

With a card, all you need is one moment of wanting something. Then you quickly swipe the card and it’s over. You don’t feel the loss until you look at your statement and realize you cannot pay it all back. 

Overcoming your debt

If you have fallen prey to this trap and spent more money than you realized, one way to overcome your debt and get a fresh start is to use bankruptcy. Be sure you know what steps to take to protect your interests and your future. A bankruptcy attorney here in Roanoke can guide you.