Irrational Behavioral Can Cost Your Money
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Authors
Jahan, Sifat
Issue Date
2019-03-29
Type
Other
Language
en_US
Keywords
Credit card , Debt , Rational behavior , Irrational behavior
Alternative Title
Abstract
A Debit Card takes money from people banking account and a Credit Card charges it to their line of credit. The Credit card is king when it has comes to paying for shopping. Most of the people want to use a credit card when they go shopping. Paying with credit card is less painful than paying with cash or debit card. People do spend more when paying with a credit card because they do not have to pay the money immediately. However, people do not think about the disadvantages of using a credit card. Credit card encourages people to spend more money that they do not have. Credit card companies charge people an enormous amount of interest on each balance that they do not pay off at the end of each month. This is how they make their money and this is how most people in the United States get into debt (and even bankruptcy).Holding credit card debt and savings at the same time is irrational. It is surprising that many people use their credit cards for everyday purchases and have some savings in separate accounts. Some people think that saving money is more difficult than paying their credit card bill. People may find difficulty to save may also find it hard to use their savings to repay debt because they fear they will not be motivated enough to rebuild their savings. This irrational behaviour is costing people money because debt is so expensive, especially credit card debt, where interest rates is high.