Does Using a Credit Card Cause You Spend More Money?

On the basis of the above mentioned pros and cons of credit card, you can analyse the correct usage of it and should be able to use your credit card responsibly.


Garima Mehra

2 years ago | 4 min read

Credit Cards, if used responsibly, can be of great help. You may earn airline miles and cash back benefits if you use credit cards wisely. You may enjoy these benefits and avoid expensive interest fees if you pay your debt in full and on time every month. However, research suggests that using credit cards may result in you spending more money than using cash. This is due to the psychological aspect of human beings as you think that you do not have to pay money now. If you think you can control your thirst for spending more money, you can apply for credit card at You spend more as you know you can make the payments later on which insists you to spend more. Here are discussed the logics behind these psychological minds. 

Why do you spend more when you have a credit card?

Is it ever the case that swiping your plastic (or metal) credit card feels more like you're spending joke money than real money? It's a common sensation. And study shows that when people use a credit card instead of cash to make purchases, they spend more money - often significantly more money.

It's logical. Cash is a piece of paper with a monetary value connected to it. You have less money in your wallet when you spend it. As soon as you make a purchase, money will vanish from your wallet. You notice it and think about it. However, since the widespread use of credit cards, transactions have become less transparent. You only think about the present and not the future, when you will have to pay the bill for your purchases and you will be charged with heavy interest rates and if you were unable to do so. You can surely apply for a credit card if you have control of yourself. If you are a person who will not be able to control yourself and will ultimately spend more than you can pay, credit cards may not be a good option for you. 

The positives of spending a credit card

It's a good thing to use your credit card responsibly. You can enjoy many benefits if you treat it like ‘real' cash and swipe just what you know you can pay back in full and on schedule." Plus, credit cards help you improve credit while also allowing you to earn considerable benefits.Of course, you may have little choice in many circumstances. A credit card may be your only alternative if you don't have enough cash in your wallet that day, or if you have a sudden emergency or change in your financial situation. For a number of reasons, including customer and employee safety, some establishments no longer accept cash.

In the end, though, responsible credit card usage is a positive thing.

Here are some of the reasons why you should use a credit card-

  • One-time Bonuses- Nothing beats a one-time bonus when applying for a credit card. Credit cards with attractive benefits are regularly approved for applicants with decent credit.
  • Credit cards allow customers to earn reward points for every dollar spent.
  • Cash Back - The best cash-back cards include cheap fees and interest rates, as well as a high return rate.
  • Security- Using a credit card reduces the risk of losing money to fraud.
  • Grace period- When you use a debit card to make a purchase, your money is immediately taken from your account. When you make a purchase using your credit card, the money remains in your checking account until your credit card payment is paid.
  • Insurance - Most credit cards come with a number of built-in consumer safeguards, such as rental vehicle insurance, travel insurance, and extended warranties on products that go beyond the manufacturer's guarantee.
  • Credit Cards Are Accepted Almost Everywhere - Credit cards are widely accepted all over the world.
  • Building Credit- If you don't have much of a credit score or are working to improve it, using a credit card responsibly can assist because credit card issuers report your payment activity to credit bureaus.

Pros and Cons of using credit cards

If you're new to the credit world, here's a quick rundown of the perks and drawbacks of the microplastic card so you can consider applying for one.

Benefits of Credit Cards:

  1. Keeping a cost record - A credit card keeps track of every transaction done with the card, and your monthly credit card statement includes a detailed summary.
  2. Purchase security- Credit card advantages give additional security in the form of insurance for lost, destroyed, or stolen card purchases.
  3. EMI option - You can choose to pay for your item in equal monthly payments rather than paying a lump sum and risking your bank account being drained.
  4. Discounts, offers and incentives - Most credit cards come with a variety of offers and incentives to tempt you to use your card.
  5. Easy credit access: The most important credit card perk is the ease with which you can obtain credit. Credit cards work on a delayed payment basis, which means you can use your card right now and pay later.
  6. Setting up a credit line : This is important since it allows banks to see if you have an active credit history based on your credit card repayments and usage.

Drawbacks of using a credit card:

  1. Scams' dangers: Each month, review your bill to confirm that it accurately reflects your transactions and that there are no indicators of fraudulent card use.
  2. Teaser rates for the short term can be tricky: If you don't read the fine print, you could find up paying a lot more in interest than you anticipated.
  3. Temptation: They make it easy to overspend because they are so simple to utilise.
  4. Interest charges: If you have a debt, everything you buy will be more expensive.
  5. Fees: There is an annual fee for some accounts. Fees and high interest rates may be associated with cash advances.
  6. Invisible Costs : Credit cards appear to be easy and clear at first glance, but they include a variety of hidden charges that may add up over time

On the basis of the above mentioned pros and cons of credit card or by visiting , you can analyse the correct usage of it and should be able to use your credit card responsibly. If credit cards are not used ethically, you can get burdened by excessive debt and fines.


Created by

Garima Mehra







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