How Credit Card Companies Trick You to Spend More Money

Humans Act Based on Perception, Not Reality

Credit card debt is spiraling, and it’s no accident.

In India, outstanding credit card balances hit ₹2.7 lakh crore in June 2024, with 10 crore active cards racking up ₹1.84 lakh crore in monthly spending (TransUnion CIBIL, 2024; RBI, 2025).

In the U.S., the total has crossed $1.21 trillion, with the average cardholder owing $6,580 (Federal Reserve, 2024).

This isn’t coincidence—it’s a global phenomenon.

Credit card companies have mastered the art of shaping perception to push spending. They use subtle design choices and behavioral triggers to make you feel like borrowed money is yours to use freely.

As someone in India who fell into this trap, I learned just how these tactics work—and what actually helped me break free.

How Credit Card Companies Trick Us

When I got my first card with a ₹25,000 limit, it felt like money I owned. The app showed “₹25,000 available,” and I took it at face value.

That perception led to a string of impulse buys—mostly online courses on coding, each priced between ₹5,000 and ₹10,000.

I’d buy different versions of the same topic, chasing certainty and reassurance.

It wasn’t random.

This is the endowment effect at play: when something feels like it’s yours, you value it more—regardless of reality (Kahneman et al., 1991).

Apps reinforce this illusion by displaying your “available credit” front and center, rather than showing you how much debt you’re about to accumulate (CFPB).

Paying with digital tools also made a difference.

Buying a course on Udemy felt painless—just a tap on my phone.

But handing over ₹2,000 in cash at a store? That stung.

This is called payment decoupling. Digital payments dull the pain of spending, making it easier to go overboard (Prelec & Simester, 2001).

On top of that, credit card rewards made it feel like I was getting something back. A 1% cashback on a ₹5,000 course sounded like a deal—even if I didn’t need it. These dopamine-triggering rewards can increase spending by 12–18% (Liu & Mattila, 2020).

Minimum payments are another trap. A ₹1,000 minimum on a ₹15,000 bill seems manageable. But it hides interest rates that run 42% or higher.

Then there’s the psychological push from app notifications—like “₹25,000 available!” right as Flipkart’s Diwali sale starts.

It keeps credit front-of-mind.

And all of it works to blur the lines between borrowed money and real income.

Our Failure to See Long-Term Consequences

Why do we fall for these designs?

Because our brains are wired for short-term wins.

Temporal discounting means we value immediate rewards more than future outcomes (Boyer, 2008).

That’s how I ended up buying the same course twice—just for the hit of feeling prepared. Paying ₹1,000 now felt easier than thinking about ₹10,000 in interest later.

I’d spend ₹15,000 out of my ₹25,000 limit, get a quick dopamine boost, and then feel dread when the bill hit.

To reduce the stress, I’d pay the minimum and buy again the next month. And the cycle repeated.

Research shows 70% of Indian cardholders carry balances, and underestimate 42–46% annual interest. In the U.S., 48% of users carry debt at an average APR of 21.91% (CFPB, 2018; Federal Reserve, 2024).

This isn’t just about overspending on essentials—it’s often about chasing security or emotional comfort.

For me, it was about trying to “feel ready” for a digital career shift.

But every extra course pushed me deeper into debt and further away from actually doing the work.

Credit cards are built around this human glitch—designing everything to trigger instant reward-seeking and ignore long-term pain.

What Can We Do About It

Credit cards can help when used right. Paying off balances monthly builds credit and opens doors for major loans in future (eg. Home loans).

But you have to reset your perception.

The biggest shift for me was reframing credit as borrowed money—not free spending power.

I started checking the app to see how much I owed, not what was “available.”

That single habit cooled my impulse buying.

I also started budgeting realistically—₹5,000 for groceries, ₹10,000 for rent—so I’d only spend what I could repay by month’s end.

Notifications were another problem. I turned off every alert that pushed me to spend.

Especially during sale seasons, that made a difference.

Now, I don’t chase rewards blindly. A ₹50 cashback doesn’t justify a ₹5,000 course I don’t need.

If I buy a course today, it’s because it fits into a plan. I pay it off the same week.

And I’ve set a personal rule: one course per subject. I supplement with free content from YouTube or Google Scholar before reaching for my card.

Before I buy, I ask: “Do I actually need this—or am I just chasing a feeling?”

That single pause has saved me thousands.

Globally, the credit card system is set up to feed this illusion. India’s ₹2.7 lakh crore debt and the U.S.’s $1.21 trillion show how widespread this is.

But the moment you see the trick, you can step back.

You can stop letting “₹25,000 available” lure you in.

That number isn’t wealth. It’s a loan. A prompt designed to keep you hooked.

Shift the focus to what you truly need. Build small habits that align with your real goals.

That’s how you build credit—without losing control.