What you Probably didn’t know about Retail Therapy and Credit card

Share this article

Have you heard the song Price Tag by Jessie J?

Seems like everybody’s got a price
I wonder how they sleep at night
When the sale comes first
And the truth comes second
Just stop for a minute and smile

Have you ever had that feeling when you’re about to make a purchase and you’re torn between the happiness of owning the item and the reality of how your bank account is going to take a hit from it?

Most of us, myself included, go crazy every time we KNOW that our FAVORITE brand is on SALE, even when we know that we do not really have a need for it. We even come up with the term “Retail-therapy” as if it were some prescribed treatment we need to keep ourselves sane.

As I was contemplating, I came across this interesting finding from FORBES about why we sometimes feel the need to spend our money.

Believe it or not, retail therapy is actually a psychologically verified thing– shopping allows people to visualize themselves in a “better” life, where they’re dressed in nice clothes or surrounded by nice things. Buying makes these visualizations a reality…. To some extent, retail therapy is completely natural and can even be healthy.

After reading this, I assessed myself and asked why do I spend my money buying nice clothes, gadgets etc. because it gives me satisfaction and assurance that “somehow I belong to this society or I have a better life, “there’s nothing wrong with that as long as you know how to spend in moderation and practise self-control

I noticed that many of us, enjoy the privilege of using our credit cards. It’s so tempting to swipe the things we like to buy. It somehow gives us certain authority of being able to afford something. it has been proven that most of the people who owns      credit cards “THINK LESS” about the things they purchased than they do if they have been spending it on CASH BASIS. Which means it is easier to spend money on Credit Card and think about it later. It encourages the natural tendency of enjoy-first-and-think-about-the-consequences-later.

It also happens to me, where I swipe first and think later. sometimes, i make a big purchase on money that i barely have, to enjoy now, and worry about finding the money later, coming so close to the brink of owing money. Credit cards can be good instruments for collecting points and benefits, however it can be a double-edged sword as this piece of plastic does a wonderful job at making money so accessible. (Plastic Fantastic!)

Do you think you would be as willing to spend if you were using cold hard cash instead? I’m pretty sure that you would think twice, thrice, or even four times!

One of the articles I read on CBNC showed 500 Americans polled who are currently in credit card debt, more than 33 percent said debt is the scariest aspect of their daily lives. That’s compared to 20 percent who said the same about the thought of dying, 17 percent who said the same of war, 11 percent who are most afraid of having to work forever and 6 percent who are most afraid of climate change.”

I have met several individuals in the course of my profession, who have been paying the minimum monthly requirement without understanding the impact of their actions.

The result: a snowballing debt that compounds on a daily periodic rate on the unpaid balance. The daily periodic rate is the card’s APR divided by 360 or 365, depending on the card issuer. The interest you have to pay is based on a compounded rate, meaning you are paying interest on interest. At one time, most credit cards performed monthly compounding, but the current fashion is to use daily compounding, which is more expensive.

You can simulate using this calculator on valuepenguin.com

For illustration purpose, a credit card balance of $10,000 with a minimum required payment of $209/mth would take you a whopping 23 years to pay off! and you would have paid a total of $48,260 for the $10,000 that you originally meant to spend!

Do not be a victim of Credit Card debt. Use Credit carefully and wisely. If you ever had to go into debt to afford something, please think again whether it really is necessary and worth it.

Today, I made a DECISION that I will control my life and my FINANCES. Now, I am free! You can be FREE too, “If I can you can do it too”

Get in touch with me for a complimentary 1-1 consultation to help you plan to meet your financial needs at all stages in your life. Schedule your appointment now via Whatsapp at https://wa.me/6592218526


The views expressed here are solely those of the author in his private capacity and not necessarily to the author’s employer, organization, committee or other group or individual.





Leave a Reply

About Me

Hi, my name is
Joshua Hoong
I’m a Chartered Financial Consultant (ChFC) at ACTS Advisory Group, IPP Financial Advisers specialising in comprehensive Retirement Planning, as well as a Million Dollar Round Table (MDRT) member.

Recent Posts


Select a Child Category

Follow Us