Having a Credit Card has Health Benefits
…still, think it’s the devil?
We’ve all heard at least one person refer to credit cards as the devil. For me, it was a missionary on my old college campus during my first semester. Today as an adult, I’m glad I didn’t listen. However I digress, when it comes to personal finances, predatory lenders and escalating interest rates definitely don’t serve to denounce its evil claim.
Credit cards do, however, offer a number of positives, that for the right people, become a useful tool.
Not only are credit cards useful, but a study of the psychological ownership of borrowed money has proven that there are even health benefits to having that piece of plastic in your wallet. So listen up.
Mine vs Theirs
The psychological ownership of money describes the extent to which a person's money feels like theirs. A line of credit is essentially borrowed money that hasn't yet been spent but is essentially readily available. This delivers a sense of financial security and boosts a feeling of well-being.
The health benefits are derived from one’s perception of the borrowed funds.
Here are a few ways that having a line of credit can promote good health:
Less Anxiety
For many people, the thought of being in debt triggers financial stress. On the other hand, one of the most common causes of stress in the US is insufficient finances to meet one's obligations. It can be a bit of a catch22.
Indebtedness is an aversive state, and people view debt obligation as burdensome. However, when funds feel like they belong to you, it increases the willingness to spend.
Many credit card companies have taken the steps to give their cardholders a feeling of comfort and autonomy through accessibility. There's rarely a limit to the way your funds can be spent.
Online platforms and banking apps now allow quick transfers, payments, and complete account visibility. Capital one, for example even allows credit limit increases in a few clicks with immediate access to the extended credit line.
This autonomy affects psychological ownership and builds confidence by lessening financial anxiety.
Produce positive outcomes
As humans, our consumption goals differ but we can all agree that we have needs. Borrowed money can help us meet consumption goals. The ability to reach these desired outcomes tends to trigger a sense of psychological ownership.
This is important because a sense of ownership increases one's general expectation of a positive outcome. When someone is used to having things turn out well, they are more likely to expect well. This positive approach promotes well-being by means of expectation.
Self-motivation
People sometimes see their line of credit as a signal of their future earnings. A study showed that people who crossed a specific credit line bracket also felt motivated to earn more financially. The larger limit became a tool to propel them to increase their financial worth and access future earnings.
This leads to the idea of goal-setting, which is also an essential tool that supports self-drivenness and self-motivation, both personal and financial.
People are also motivated by a sense of security. With e-commerce covering a large scale of most purchases, many feel secure to use a credit card instead of their debit.
Despite encryptions and other security measures, even the largest companies have taken prey to data breaches. Did someone say the US Treasury?
When it comes to recouping funds, a bank is more likely to recover credit theft faster than that from a personal checking. Most banks also offer points and rewards with each purchase.
Let the happiness ensue.
While it is a pleasure and healthy to have a solid credit limit, responsibility and discipline are recommended.
Feel good knowing that you have security, flexibility, and a backup plan if needed. Use your credit as a superpower to improve your health and financial well-being.
