Credit Card Is a Typical Double-Edged Sword

Credit Card is a Typical Double-edged Sword

Have you ever faced a situation where the cards affected your credit? Why are some people disgusted with credit card? Some people believed that credit card is a typical double-edged sword. In our life it is a good helper; but if someone is not careful, you may pay a high price. Credit card brings convenience to you. At the same time, it can let you fall into the crisis, because it allows you to spend more, then causes inflation and cannot guarantee your information safety.

Credit card invisibly let you add to more spending when you are shopping or booking something online. Some interesting researches states, “People with credit cards are focusing more on spending than saving”(Lawson). For example, credit card points can provide gifts to attract more of your spending. All dealers will tell you that opening your credit card is free, and you can obtain gifts now, then you can use points to transfer our goods what you want. This is a trap that makes you spend more money. Meanwhile, when people are shopping or booking online with a credit card, it seems that they just spend others’ money. Unlike using cash or debit card, people will produce a different psychology. It is hard to get into a good financial habit. Just as John Lawson said, “People are not thinking about their savings as much as they could be. There is a strong chance some of this money could be better managed and invested for the future.” In other words, no feeling is a bad thing when you are spending. In addition, more people use credit card to buy more luxurious things that are never considered before. Both vanity and desire like a bottomless pit that can never be filled. They will not save any money.

Not only does the influence effect on human being, but it also cause problems in society. Credit card makes banks own more bad debts when some people do not have enough ability to repay their credit card bills. “The introduction and widespread use of credit cards increases trading efficiency but, by also increasing the velocity of money, it causes inflation, in the absence of monetary intervention” (Geanakoplos and Dubey). Firstly, while banks attract customers to open new credit cards, they also take more risk to themselves. As we know, bad repayment increases the burden of banks. Secondly, when there is default on credit cards of some individuals, there is even more inflation about economic and less efficiency gains in marketing. This may be a source of stagflation. Finally, once people cannot