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Wednesday, June 11. 2008

Credit cards and the brain

In commercial societies, everybody wants you to buy their stuff.

Even though retailers lose a bit of their profit in their credit card fees, credit cards make it so easy to spend money painlessly and impulsively that, overall, they are a boon to retail commerce.

The average American received 15 credit card mail solicitations last year, so they're making plenty of money on this too. Good for them.

Spending discipline, thrift, saving, and "making do" are traditional American virtues, but, like so many valuable traditional virtues, they seem to be gradually going by the wayside in the face of our prosperity and growth. As David Brooks discusses, Seduction of borrowed money is making U.S. a nation of debtors.

The Frontal Cortex has a piece on Credit Cards and the Brain. Predictably, spending cash and spending via plastic have different impacts on the brain.

Financial suicide is painless. My rule is that all of my credit cards must be paid in full each month.

Posted by Dr. Joy Bliss in Our Essays, Psychology, and Dr. Bliss, The Culture, "Culture," Pop Culture and Recreation at 07:33 | Comments (6) | Trackbacks (0)

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I fear you and I are a vanishing breed, carrying debt instead of paying it off seems to be the norm.
#1 Retread on 2008-06-11 10:28 (Reply)
Well, at least one young family in CA is not carrying any debt except our mortgage. I had very bad money habits when I first got married, but luckily, I knew I had problems and let my husband set the pace for our money management. We use our credit cards for everything, but we pay them off every month and just get the benefits of airline miles, gift certificates, etc. I will add one more tip that has been a huge help to me. Find a good bank that does not charge for teller visits (some do!) and get rid of your ATM card. Almost all banks have hours during the week where you can visit to deposit, get cash, etc. With ATMs, a little here and there will add up much faster than you realize. If it costs time to visit the bank to get cash, you might think twice about that purchase.
#2 Eilish on 2008-06-11 13:18 (Reply)
Just about everybody has screwed up with easy credit at some point in their lives. It's a learning experience, a growing-up experience, a reality lesson.
#2.1 BD on 2008-06-11 13:23 (Reply)
Dr Joy , you should know better no suicide is painless. Any form of suicide is a permanent solution to a temporary problem.Your rule on credit cards is the same as mine. It requires discipline, discipline, discipline. Unfortunately our society does not reward responsibility,accountability, or discipline.
#3 jappy on 2008-06-11 16:59 (Reply)
The fall is painless. It hurts for a second when you hit the ground.
#3.1 Dr. Bliss on 2008-06-12 10:48 (Reply)
We've paid our credit cards in full every month for twenty or thirty years, and have no mortgage or other debt. Credit cards are a handy way to keep track of purchases (we tend to avoid cash), but they're a terrible way to finance spending long-term.

Live below your means and save for your own retirement. Otherwise you have to eat too much s**t.
#4 Texan99 on 2008-06-13 09:52 (Reply)

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