I’ve heard of blaming one’s weight on a lot of things, but credit and debit cards? That was a new one for me and a theory reported at TheStreet.com that, when considered carefully, does seem to carry a lot of weight.
According to the study, there are two main reasons that credit and debit cards are making people fat. First, using debit or credit cards feels more comfortable than using cash. Plastic is so easy, it’s mindless. It’s a stand-in for the real thing. On the other hand, physically handing over cash is tangible and real. And it can be downright painful to part with hard-earned cash!
The authors also conclude that the link between debt and obesity is impulse. Using plastic payment methods increases the likelihood of impulsive purchases, specifically junk food. People are more likely to grab unhealthy foods on impulse and are then more likely to carry through with the purchase if they’re using plastic. But if paying with cash, they are more likely to rethink the unhealthy choice and walk away.
READ MORE: Everyday Cheapskate: 6 common money blunders, and how to fix them
I believe there is yet another message here: Cash is tedious, old-fashioned and not very cool. But swiping plastic is modern, fast and considered impeccably safe. And when that plastic payment is made via an app, it can be done in complete privacy. In the blink of an eye, it feels as if payment is complete and no one has to know.
Clearly, consumers have bought into this theory in a big way. RBC Capital Markets reports that you will spend 20%-30% more if you pay with plastic. It’s not the real thing, so we don’t treat it with the seriousness we treat currency. A $9.50 payment with plastic is nothing compared to handing over a $10 bill, which makes us at least pause and think. In fact, most people don’t even pay attention to the total amount when swiping plastic. And that’s where the consumer credit industry has duped an entire generation.
It’s a pain to dig in the pocket for…
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