It is well documented that some cardholders have problems when they have problems Too much credit card spendingThis leads to debts that are difficult to repay.
But why does cardholders feel free to buy more expensive items with cards, such as vacations, furniture, electronics, appliances, jewelry, etc.?
According to a study by MIT on the neural mechanisms of credit card spending, this is because credit cards reduce the pain of payments and therefore “release the brakes” that reduces spending. In fact, the study noted that credit cards can actually encourage cardholders to “step on gas” and increase the motivation to spend.
Ultimately, it’s all about emotions, perception and behavioral psychology, says Jonathan A. Colmetz. Financial Therapist and Certified Financial Planner (CFP) A person who specializes in money psychology, spending behavior and financial decision-making. “There’s an important psychological lever that keeps people swiping,” he says.
- Relieve the pain: For example, I feel that spending $200 on a credit card for a new pair of new high-end athletic shoes is different from spending the same amount in cash.
- Spending to earn rewards: Just like with cardholders, you spend on your credit card and earn value in the form of points, miles and cashback.
- Fear of missing out (FOMO): How to have a premium credit card American Express Platinum Card It encourages brand identity, exclusivity and sense of belonging.
According to bankrate tracking rewards in debt investigations, four in five cardholders are making at least some effort to win the reward. And in fact, many people who sign up for reward credit cards have good credit scores and are able to repay their balances each month. Second, they avoid paying interest when spending to earn points, miles, or cashback.
But that’s not the case for others who make games out of accumulation of rewards. What really appeals is that you need all three levers frequently – to remove pain, to wager the system, to increase your status and sense of belonging – to convince these people Pay the annual fee And they earned a high profit, says Colmets. “Banks know that. Marketers know that. But most cardholders don’t.”
Credit card mental exercise
Kolmetz said the combination of brain chemistry, gamerization and FOMO connecting to checking makes overexpenditure feel potentially unsafe.
“Credit cards aren’t inherently bad. Sometimes people’s needs and desires can’t see the forest of trees,” he says. “It’s a capitalist society, and for-profit companies have boards and shareholders who want to maximize revenue.”
When it comes to credit cards, some people are naturally pessimistic and are constantly looking for danger, says Colmets. “Others are more susceptible and open to being persuaded to spend more on the card.”
In these cases, the ductive reasoning is gone, and people are more susceptible to gamification, says Colmets. “The brain uses mental exercises to deny annual card fees because it earns miles and miles to ‘pay’ for holidays,” he says. “If your life has needs and high desires, it’s not a very spiritual jump.”
Card and cash pain
According to Kolmetz, credit cards can effectively hijack the brain’s pain system. “It hurts to pay in cash,” he says. “You feel it leaves your hands. Your brain registers it as a real loss and activates the cortex of the island, the same area that handles physical pain. That pain will cause you to pause, reconsider, and even walk away.”
However, credit cards mute the pain. “Swipe or tap distances you from the cost. You’re not leaving money or paying for the mood. It’s just a quick deal,” says Colmets. “And because there is a delay between spending and bill payments, your brain separates actions from the outcome.”
Gambling with rewards
In a way, credit card points are like a draft king for a poor man, says Colmets. “It’s not totally gambling, but feeling? Damn it’s close. The chasing point is like trying to compose at a casino. You might get a free buffet, but the house always wins,” he says. “The mathematics behind the compensation program are designed with the favor of the bank. In total, they benefit transaction fees, interest, and damages (points that are never redeemed).”
Of course, many cardholders will navigate these reward programs responsibly and use a targeted approach to earn rewards that they can redeem for trips they otherwise wouldn’t afford. They use spreadsheets to track rewards, spend strategically to obtain miles or cashback, seeking the best redemption options to cover costs, such as business and first-class flights or stays in premium hotels.
In fact, according to Bankrate’s Summer 2025 Travel Survey, 20% of American travelers use reward points or miles to pay for their summer 2025 trips.
Credit cards and FOMO
Luxury credit card Take advantage of human tendencies regarding brand identity, exclusivity and FOMO, according to Kolmetz. “But here’s a twist. It’s not just the rich. Humans are wired to seek belonging, and being part of an affinity group creates a sense of value and status,” he says. “That’s why people bend their Amex Platinum cards at dinner, but there’s also a reason they’re willing to pay to be a Costco member. Honestly, they’re not as sexy as they get it.”
The card itself becomes a symbol and a physical marker for the tribe you belong to, says Colmetz. “It’s the same as a Rolex watch, Hermes Birkin bag, or even a Starbucks gold card. Every company is taking part in the game, weaving membership and status into the brand story,” he says. “Whether it’s a (AMEX) Centurion Card or a warehouse club ID, psychology is the same.
Get help
The reasons why people place credit card debt may be complicated and vary, but the effects of doing so are almost universally negative. Among credit card debtors, 84% say that debt affects financial choices, including large purchases, taking leave, or whether they are looking for a new job, according to Bankrate’s Credit Card Debt Report. 29% of card debtors said their choices were heavily affected.
If your credit card debt is out of control, it is important to realize that you are not alone. According to Kolmetz, “It’s a very common problem with embarrassment, shame and guilt. Not getting help just takes the problem further.”
Develop a powerful financial system
Getting out of credit card debt is intentional and developing a system, says Todd Christensen, a certified financial counselor and financial educator at MoneyFit, a nonprofit organization that provides debt relief, financial education and personalized support. “The willpower isn’t enough,” he says. “That’s why it’s important to develop a system that automatically pays invoices. The key tool is to create a separate checking account from what you used to pay invoices.”
Once these systems are set up, the debtor can spend money on that other account if necessary, but when it was gone, it was gone, Christensen says. “You can’t transfer more money from the account you pay invoices,” he says. “It’s one of the tools I teach and I make sure my clients aren’t fighting impulse purchases because impulses always win.”
Please know your number
Complement your new financial system with a sustainable budget. This will help you manage your expenses responsibly while continuing your debt payoff journey on track.
To get started, enter your debt amount to see the estimated monthly payment and repayment time using Bankrate’s credit card payoff calculator. Here’s a way to help reduce the balance of your cards:
The convenience, ease and spending message of Card Issuers could actually work for consumers who take these steps, Christensen said. “You can buy it now and pay later. But it’s really about deliberate spending,” he says. “Money is a finite resource. Your money is the most important thing to you, and how do you intend to control your spending, not what the marketer is telling you?”
Seek professional support
If you don’t manage your own debts, it may be time to get help from reputable nonprofit credit counseling organizations such as Christensen’s MoneyFit, Money Management International (MMI), and GreenPath. These groups can help you create debt management plans that will help you lower your card profits and pay off your balance faster.
“Clients who participate in our program are told their cards will be closed. They will have to live on debit cards, online bill payments, or cash,” says Christensen. “It’s forced discipline. I tell them that this will be uncomfortable or a bit convenient,” Christensen says.
Ironically, card issuers have listed the market how convenient it is to use plastic and build rewards, Christensen says. “It appeals to our nature, but even so, what it really does is make it hard to say no to unnecessary costs,” he says. “The reality is that credit cards are more convenient and are much easier to use with merchants. When you really use them, you accumulate debts faster.”
Conclusion
Every consumer begins a personal financial journey from scratch, but credit card companies have decades of data and billions of transactions, tweaking the system. “They know exactly what works and what doesn’t,” says Colmets. “The real dangers don’t fully understand these powers, or attract you most. This makes you more susceptible. This is not about mathematics. It’s about emotions, perception, behavioral psychology.”
