Fatter, Dumber, Poorer: Lamenting the Credit Card
What’s the Latest Development?
As we move toward a more cashless society, the dangers of credit transactions are becoming more apparent as those vulnerable to abusing credit also increase in number. “In the 1970s, fewer than 20 percent of the adult population owned a credit card. Today, between 70 and 80 percent of the adult population does. In some cities, being forced to pay with cash already feels like a precious anachronism.” Researchers say people make different purchasing decisions when using credit cards, compared to shopping with cash, because credit cards present an illusion of liquidity and confuse the ability and the means to spend money.
What’s the Big Idea?
All of the inconveniences of cash may actually help us spend money more wisely. The physical weight of money, its limited nature (requiring trips to the ATM), and that it requires us to do math–all these qualities make us think twice about spending it, whereas sliding a credit card is as easy as eating ice cream. And speaking of sugary treats, researchers have found that while food shopping, consumers buying food with a credit card were more likely to buy food items they identified as unhealthy. “In this way, the permissiveness of credit cards weakens consumers’ judgment in more subtle ways than total amount spent.”
Photo credit: Shutterstock.com