Having a credit card in your pocket increases your spending. Even if you don't want to, you spend. With a credit card, you buy unnecessary things as well as necessary things.
There are various psychological and financial reasons behind spending more on credit cards. Credit card users often spend more due to psychological reasons. The spending is not seen, it is not coming out of wallet like cash. Spending has less impact on your psyche.
Spending from card also satisfy instant gratification: Even if you don't have cash in hand, you can make instant purchases if you have a credit card.
Credit card also bears social pressure: Buying expensive things with a credit card allow one to show off a luxurious life. It also rewards cashback greed: Spending more to get points, bonuses, discounts, etc. For example, various organizations offer various offers.
If you shop for Tk 5,000, you get Tk 500 cashback. When you spend cash, you have to calculate the money repeatedly, but it is not visible on card. As a result, you spend more.
Financial reasons: There are also some financial reasons for spending more on credit cards. Now let's see what the main reasons are. Easy availability: There is no cash in your pocket. No worries, you have a credit card.
So you can spend easily. This thinking leads to spending more on credit cards. For example, you do not hesitate to order online even if you do not need it.
The temptation of credit limit on cards: The higher the credit limit, the more opportunities offered. This leads to loss of control over purchases. As a result, you spend beyond your plan.
Delayed payment: When you spend on a credit card, you do not have to pay it immediately or after a day or two. The credit card bill comes next month. Then you have to pay it. When your salary comers next month - this leads to more spending.
One can pay by installment. He can spend a large amount of money like buying a TV, fridge, AC using credit card. Banks, shopping malls offer various attractive offers at different times of the year, which push you to spend for extra. 20 per cent discount.
In such campaigns, people buy extra things even if they do not need them and this is how credit card create extra financial load for the customer.