Have you ever found yourself tempted to spend more than you can comfortably afford when making purchases with a credit card?
This is a familiar dilemma that many Australians face on a daily basis.
Credit cards provide a whole range of benefits, from the ability to borrow from the future during times of financial difficulty to maintain a constant standard of living, to the simple convenience of carrying a card instead of cash.
However, research suggests that credit cards can psychologically stimulate overspending, leading to long-term debt problems for many Australians.
Overspending with credit cards is common because:

1. The average credit limit is usually a multiple of consumers’ monthly incomes. A limit that high can make it easy to overspend.
2. Credit limits can also help purchases appear small. For example, a $10 chocolate bar might seem less expensive when compared to a $5,000 credit limit.
3. The minimum payment is generally only 2% of the total balance. This makes it very easy for consumers to be tempted to make a small payment today to get through the month and worry about actually paying off the debt later.
4. Credit cards make it easy to splurge. Research has shown that people are often willing to pay double the price for an item when using a credit card as opposed to cash, because it is less psychologically painful to swipe a credit card than it is to physically hand over cash.
5. Credit can psychologically stimulate the desire to spend money. A series of experiments conducted in the 1980s suggests that consumers are conditioned to associate credit card logos with consumption and purchases.

If your credit card debt has snowballed into a serious problem and you are in need of a professional debt solution, contact the insolvency experts at Debt Free Australia (DFA) today. We can provide free professional financial advice on your debt problems, as well as help you to find an appropriate debt solution, should you require one.
Talk to our friendly staff now by calling our free 24 hour hotline at 1800 676 598. Don’t delay taking action – begin your journey to a debt free future today!