Credit Card Tips for Smart Holiday Spending
Black Friday and Cyber Monday are right around the corner! These are two of the biggest shopping days of the year, with the majority of purchases being made with credit cards. To ensure the day after Black Friday doesn’t become Broke Saturday 😅, I’d like for you to consider something. 
People who use credit cards spend 18%+ more money than if they’d used cash. I’m not talking about interest or fees, but money spent on actual physical items / services purchased. Now hear me out… I’m not here to promote an all-cash budget as Dave Ramsey does (hellooo credit card points… amiright?!) but instead to make you aware of the emotional differences in using credit cards versus cash so that you can be more intentional when making purchases, regardless of the method used. 
When using a credit card, we’re not immediately parting with our money, which can create a disconnect between the pleasure of purchasing and the pain of paying. This phenomenon, known as “payment coupling,” means that the time gap between buying something and actually paying for it reduces the psychological pain associated with spending. It’s so much easier to use a piece of plastic than deal with the emotions of physically counting and handing over bills. Further, we notice how much less cash takes up space in our wallets which allows us time to process whether we really wanted to purchase that item in the first place.
Studies have also shown that using credit cards activates the reward center of our brain, associated with pleasure. In other words – spending with a credit card can literally be addictive, similar to anything we enjoy doing that provides an instantaneous boost of dopamine, as it feels physiologically like we are being rewarded. This is why credit cards can be so dangerous because we feel rewarded for impulsive shopping (i.e., unplanned purchases).
There is nothing inherently wrong with using credit cards. The key is to do so responsibly, from a place of awareness and intention. If not, the costs are steep – especially for those unable to pay off outstanding balances in full each month. 😬
Responsible credit card use can look like:
- Tracking spending 📒
Use budgeting apps or regularly review your credit card statements to stay aware of your spending patterns. -
Setting spending limits 📊
Establish personal limits for different categories of expenses and stick to them, regardless of your credit limit.
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Visualizing cash transactions 💰
When using your credit card, imagine handing over the equivalent amount in cash. This will help recreate the “pain” of spending.
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Paying balances frequently 💳
Consider making card payments weekly to maintain a closer connection between buying and paying.
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Using cash for discretionary spending 💵
Using cash for non-essential purchases naturally limits overspending in these categories.
Being aware of how credit cards can influence our spending is the first step towards better financial health. Remember, credit cards aren’t inherently bad – they offer convenience, rewards, and other benefits when used responsibly and with intentionality.
Happy Thanksgiving and Native American Heritage Day! 🦃
