People who are facing bankruptcy often cite high credit card bills. They assume that they’ve made a mistake with these cards.
What really may have happened, however, is just that the credit cards themselves were designed to promote consumer overspending. It’s a common trap for many people.
You don’t feel like you’re spending real money
The issue is that there’s a psychological trick embedded in credit cards in general. They do not make you feel like you are spending actual money. You certainly are, since you have to pay the money back, but it’s not the same as physically spending cash. This disconnect promotes overspending.
As a minor example, imagine that you go to the store with $100 left in your budget for the month. When you check out, you have $110 worth of goods. If you have a $100 bill in your pocket, you’re forced to put back $10 worth of items and buy what you can afford. If you have a card, though, you just shrug and assume you’ll figure it out later.
Cards also make impulse buys easier. You know you can’t afford something, but you do have room on a credit card to buy it. Again, you just decide to put off figuring out how to pay it back, and you buy the item. If you needed physical cash and did not have it, you could not make that purchase no matter how badly you wanted to do so.
Are you facing bankruptcy over credit card debts?
As interest mounts, you may find that you can’t pay off what you owe. If so, it’s time to look into your bankruptcy and debt relief options. An experienced advocate can help you understand more.