But there is a lot not to like about credit cards and how they work. While other types of debt can be managed and paid off more easily, credit cards are more difficult and have all kinds of ways to make you overspend.
Debit cards are like a plastic check book. You can only use a credit card for as long as you have money in your bank account to cover purchases. That means you’re not actually borrowing money.
Credit card companies know that once they’ve got a card with your name on it, it’s only a matter of time before you owe them interest.
They start with low introductory rates, even as low as 0% on purchases for up to a year. This will make even people that wouldn’t think about borrowing money on a card fill out that application in a heartbeat.
Of course, that introductory rate will eventually increase and even the most disciplined saver will have trouble paying off the entire balance before owing interest.
Credit cards will even benefit from the psychology of money. Studies have shown that people are willing to spend more when they pay with a credit card rather than with cash.