Do you use your credit cards as a pick me up when you’re feeling better? Or maybe you find yourself charging more when you’re out with your family or friends? These are both symptoms of an emotional card spender.
How Emotions Lead to Credit Card Spending
Emotional credit card spending happens because you’re seeking a thrill, not because you’re buying something you actually need.
Buying things feels good. Buying things with credit cards feels even better because you can make a purchase something without having to spend cash, something psychologists say is painful. It's the classic tale of getting something for nothing.
With emotional spending, you don’t think of the consequences, only about making yourself feel better right now. Instant gratification has a cost, though. You may not pay now, but you will pay later.
Tips to Stop Emotional Credit Card Spending
Do something that makes you feel good, besides using your credit card. Recognize the urge to spend money because you’re sad or in a bad mood, aka retail therapy because depending on just how sad you are (and on your credit limits), it could take thousands of dollars to boost your spirits. Even if it only takes a few dollars to feel better, you create a dependency on using credit cards as a mood booster and it can add up if you’re not careful. Explore some other ways to boost your spirits, like working out, taking a walk in the park, enjoying a warm bath, or talking to a friend.
Don’t try to keep up. Have you ever been shopping with someone else and felt like you needed to have as many shopping bags as them? Keeping up with friends and family could be one trigger to emotional spending. You increase your spending because you want to seem like you have just as much money as or more than they do. In reality, you don’t know whether they have the money they’re using to make those purchases. Learn to be comfortable with the money you have. Or, don’t shop with people if you’ll feed the need to keep up with their shopping pace.
Don’t believe the ads. One of the reasons that people turn to credit cards when they’re feeling emotional is because credit card companies want you to believe their products will solve all your problems. For example, MasterCard wants you to think things you purchase with their credit card are “Priceless.” Having a bad day? That trip to the spa will cost you $150, but the uplift you get will be priceless. Not true. The uplift will be shortlived and the spa trip could end up costing you double that.
Don’t buy just because you’re in the store. Remember window shopping? That’s when you just browse through a store without making any purchases. It’s a much cheaper solution to boredom than actually making purchases. The same thing goes for online purchases where it’s often easier to buy. Before you enter your credit card or Paypal information in a website, make sure you’re buying something you actually need and not making a purchase “just because.” Do you have to talk yourself into making the purchase? You may not need it.
Don’t shop when you’re emotional - stressed, sad, angry, frustrated, bored, having a bad day, or feeling bad about yourself. These are all times when you’re more likely to spend based on emotion alone, not out of need. When your spending is based on emotion, you’re more likely to spend more than you can afford to pay back.
The key to controlling your emotional credit card habit is recognizing it. That's when logic kicks in and tells you that you can't really afford the credit card purchases you're about to make. You may have to take more drastic measures to stop credit card spending - like freezing your credit card in a block of ice that will have to melt before you can use your credit card.