Now almost anyone can ask for a credit card apply online and start spending the given credit limit! But the main question is – Does credits card increase individual expenditures?
Based on the latest studies, individuals are likely to spend more with credit cards than cash. However, credit cards offer profitable deals to cardholders that average cash spending does not offer.
This guide will discuss how credit cards can increase your spending. We will learn the correct method to utilise credit card benefits to your own advantage. So let’s begin!
A Hard Truth: Cash is Limited
Whether you are a salaried employee or a businessman, your monthly earnings have a limit. Like you, every individual has a limited cash amount that they can spend.
On the contrary, credit cards give you free access to a certain amount of credit limit that you can use for any purpose. Naturally, people tend to spend the credit limit instead of emptying their cash holdings!
The Psychology Behind Credit Card Spending:
When someone uses a credit card, he convinces himself that he is not spending “real cash”. Even though that ideology is correct, he is responsible for returning the spending amount within the given billing time. Additionally, he is charged with credit card interest fees on the spending amount.
The concept of credit spending is simple — you’re borrowing the bank’s money instead of spending from your own pockets.
“Debt 101”, a financial advice book by Michele Cagan, explains how banks make significant profits through credit cards. You are lured by the opportunity to buy desirable entities. You know you’ll have to pay out the credit card bills eventually. Still, you choose to pay smaller payments through credit cards. It makes your spending seem like bargains.
While you pay back your credit card spending slowly, you don’t feel pressured to complete the remaining due. Like you, this is the reason why many people prefer to buy now with a credit card and pay later!
Which Is Preferable? Spending Future Money? Or, Present Money?
It’s psychologically less painful to spend in the future than now. It makes sense to save up the present money while spending the future money in a well-planned manner. Using a credit card is the perfect option for individuals who prefer spending future money over present money.
So which option do you prefer? Whichever you choose, always remember that you will have to clear the credit dues in the future. Still, you will get a significant time difference between your purchase time and your actual paying time.
Does Easy Credit Card Accessibility Make People Spend More?
If you know how to apply for credit card, then you must agree that it’s very easy to apply for and get a credit card. Financial institutes and banks offer free credit card options to people from different income categories. Anyone can easily apply for a credit card online by following the below steps:
- Visit the credit card issuer’s online portal or website.
- Choose the type of credit card you want.
- Click “Apply Now” to check your eligibility.
- Fill in essential details and submit the online application.
- Submit supporting documents such as income proof, identity proof, etc.
- Track the application status online anytime you want.
- After the bank’s approval, get the credit card activated and ready for use.
Now you know how easy it is to get an activated credit card these days. Naturally, credit card holders get easy access to the credit limit that they can use to purchase desirable items.
What Is The Positive Side Of Credit Card Spending?
Despite the high potential of overspending, credit card holders can still utilise the card’s benefits to their advantage. Credit cards from different issuing banks come with many profitable benefits:
- Get Periodic Rewards: Most credit card issuers offer cashback bonuses and reward points based on the cardholder’s card usage. So you can get rewards points after you do credit card apply online. Later, you can encash those points.
- Limit The Spending: Indeed, your credit card has a fixed limit. You can fix your spending by limiting the allowed transaction amount on the card. In that way, you can stop yourself from making impulsive purchase decisions.
- Get Gift Vouchers: Premium brands often offer gift vouchers, and additional discount offers to certain types of credit card holders. Utilise the available offers on your cards to save some money and get good discounts on your bills.
- Convert Spending Into EasyPay EMIs: You can convert spending into short-term or long-term EMIs. In this way, you can pay promptly and clear the remaining dues.
How Can You Stop Overspending?
Now you know how to apply for credit card, visit the official portal to check your eligibility. Once you receive the credit card, use it wisely to make the most necessary purchases. Always consider your current income to set a spending limit on your credit card. Otherwise, it will be difficult for you to make on-time credit bill payments. Make sure to follow the above times to utilise the card to your advantage!
