Credit cards nowadays are as ubiquitous as cash used to be when our parents were young. We make the vast majority of our purchases using them, with cash often relegated to something you only use in rare situations, like if a store’s card processor is down or to pay for parking at an event.
But just because they’re the new normal doesn’t mean credit cards aren’t without their dangers. There’s a well-documented history of people developing addictions to credit cards and spending far more with them than they’ll ever be able to realistically pay back. If you feel like you or someone you know is beginning to go down that dangerous path, here are the 10 signs you may be developing an addiction to credit cards.
This is a telltale sign of a budding addiction. By design, credit cards make us believe we have the money to purchase anything we want, regardless of how much money we actually have in the bank. It’s a great feeling of power, but ultimately a temporary one. At some point we all have to pay the piper.
Why are you hiding your credit card spending if you’re not ashamed of it? The answer, of course, is that you are on some level ashamed of how much money you’re spending on your cards and you’re worried about the repercussions of your significant other or financial partner finding out.
Ideally, you should never have any debt that rolls over month to month on your credit cards, but if you do, a sure sign that the number is too high is that you find it uncomfortable to think about it. You mentally shy away from thinking about it and instead prefer to focus on the moment.
What’s your plan to pay off the debt on your credit cards? Do you have one? If you can’t answer those questions, then you’re probably never going to be able to actually do it. And if you answer that you’ll pay it off with a tax return, bonus from work or a winning lottery ticket, then this point still stands. Random acts of God are no basis for financial stability.
This isn’t a sign of addiction per se, because plenty of people open new credit cards to take advantage of 0% introductory rates, but it is a sign that your debt could be getting out of hand and becoming unmanageable. It’s also important to realize that at some point you’ll stop being approved for new cards, and then all that interest will suddenly come due.
If you find yourself making big purchases impulsively and later regretting the items you bought, that’s a strong sign of a credit card addiction. With a credit card, it can feel like you have enough money to buy almost anything, and they can disconnect you from the reality of the money you’re actually spending.
We all have ways of managing stress in our lives: some people play video games, some eat, some workout. But some forms of stress relief are better for our long term well-being than others. Spending money is one of the worst ways to blow off steam, and credit cards only compound the problem by pushing the consequence of the behavior down the road.
The ultimate tip-off that the two points above are happening to you is if you begin to find your home filling up with things you don’t need. Do you have five tablets? Unused furniture? Unopened Tupperware? Buying stuff like that just proves that you’re spending for spending’s sake, and letting your credit card debt grow as a result.
One strange side effect of credit card addiction is that you start clinging to your credit cards even when the behavior stops making sense and you refuse to consider other forms of lending, like a refinancing your mortgage, installment loans, or other types of personal loans. Each has its own strategic value in paying down credit card debt, and can help your financial situation in the long-term.
While it’s true we’re not the ultimate authority on credit card addiction, there is no denying that the first step to breaking the cycle of addiction is to admit you have a problem and you need help. If even only a few of these signs of credit card addiction apply to you, you should at least pause to consider whether you could possibly have a problem and contemplate what steps you need to take to alter your behaviors.