Credit cards are designed to ensure you morph into a relationship with them which endures over a significant period of time and that bond is directly related to your amount of debt. Companies realize consumers often make decisions based on other considerations rather than practical and fiscal concerns. They definitely apply this knowledge in ways that manipulate your financial burden. Here are four methods they continually employ.
Making Things “Pretty” Can Work to Manipulate Your Financial Burden
Back in previous decades, credit cards were definitely not anywhere as lovely in appearance as they are now. Then banks received the brilliant idea to allow people to express their personal side by producing cards in every color and pattern. Every time you purchase an item you can show your reverence to your favorite sports team or even acknowledge your association with a particular charity.
The premise behind this shift is based on if you mold something or select it with characteristics that bring you pleasure, you are are more likely to attach a value to it. If that is the case, it only follows you will use the card more frequently and be loathe to part with it.
Initiating Instantaneous Satisfaction
The very act of credit, where you can pay for something without the actual cash, is a way of behavior that possesses universal appeal. That’s because people have a built in reaction to honor what can be accrued right this second rather than down the road. You know you should be doing something else productive but sneak in that “guilty pleasure” anyway. Even if it’s just watching a tv show when you should be preparing for that big meeting the next day.
This is the exact reason why some people spend way beyond their means with credit cards and then find themselves in a financial morass they need a rescue team to get out of. You find some way to justify the spending but put off the actual reality of the payments until they arrive. Credit card companies know this irrational tendency and the use it well to manipulate your financial burden.
Leading You Into Temptation
Remember when you first got on that diet and were absolutely dedicated to the cause? That is until a co-worker arrives with your favorite donuts and you cannot resist. What’s the harm in just one? One turns into two and then you already messed up today so why not indulge a little more? By the next day your diet is out the window. Credit card companies use this innate human talent to not be able to exercise restraint to their advantage to manipulate your financial burden. They accomplish their goal by techniques such as increasing credit limits or lure you into applying for a new card with a no interest balance transfer. Both methods encourage you to use your card without thinking about future consequences.
Setting Timetables on Rewards
Nearly all credit card companies now provide bonuses for their use and these rewards come in a variety of forms. That is great and all, but many cardholders are accruing more interest than what they get back in rewards. The responsible card users that resolve their total amount due at the end of each billing cycle are the ones taking advantage of the bargains. The general population, however, usually carries that balance so while they think they may be losing out on a deal they are only hurting themselves in the long run.