Spending Behavior Essay

When it comes to learning about credit cards, most people do not expect to hear that it can effect a persons overall emotion and wellbeing. By having a credit card close at hand people are able to spend money knowingly but do not realize the implications from their choices. They make decisions that they would not have made otherwise if the consumer paid in cash or the full amount up front on the credited bill. Researcher Greg Davies wrote a paper on the overall behavior of human emotion when it comes to consumer goods. “ His 2003 paper, The Realities of Spending, looked at models of spending behavior and how they were influenced by means of payment . . . The paper identified several theories which could explain why people appear to make irrational

When this happens the borrower falls into debt over the years unless they are able to control their spending habits. Credit cards were originally created to help people buy things when it was desperately needed. It was not created for basic transactions but over the years it has changed into our main source of payment. Every year, the overall amount that borrowers fall into debt increases by billions of dollars. People continue to spend money that they are not able to repay during the period of time given to them. A prime example of this is “ Within two years, Gemma had incurred 14,000 of debt. The money went on clothes, holidays, meals, and luxuries.” After this Gemma then stated “I realized I was in financial difficulty when the bills started to come through and I struggled to make the minimum payments. I started to feel ill about it and realized I needed help. I got into that mess because I just didn’t get it. I didn’t get what money was about, I didn’t understand it”(Harding). Most borrowers and consumers do not understand the true use of credit cards like Gemma. They do not try to look into the consequences of having a credit card and its real

Not only do they fall into debt and spend beyond their limits, but they also forget to read the small print. Most consumers borrow money from credit card companies but do not realize add on fees. For every late payment or transaction that goes against the credit card companies guidelines just adds for more consequences. This leads borrowers to spending even more money on the items that they originally bought. Especially if they are already having payment problems on the monthly bill this just adds to the amount that needs to be paid off. Credit card companies intentionally target borrowers that are already struggling with debt because they know that there is more money to be made off of them rather then clients that pay their monthly fees on time. Author, Patrick Maysun Jose, journalist for The Post and Courier Newspaper states “ critical of the card issuers’ heavy fees and aggressive marketing tactics, especially toward finance-naïve student and low-income communities, Levin says people have been bludgeoned by credit card offers, often going to consumers already struggling with debt . . . “ By not having the proper knowledge about credit cards and their policies more and more people suffer from debt that could have been