Credit Card Debt? Probably you look for immediate rewards

Today I was trying to do some research into personal finances, my idea is that I made mistakes in the past because I didn't have enough information. Reading a scientific paper from the American Economic Journal, I found that 45% of credit card holders carry a balance on their credit cards. That number can tell us a lot about how we use them.

To finance a big purchase that we cannot afford. To have a dopamine high.

A few years ago I was one of those who will carry a balance from one month to another. In my mind, if I could pay the minimum payment, I was on the other side. The problem is that I never made basic math to see how much I was paying on interest.

Now after some financial education from a friend and some personal research I realize that I was making a huge mistake. That carrying a balance is a waste of money that can be avoided with little effort.

In the same paper, they did some research on how we plan ahead and how this influence how we use our credit cards. They did this research to see if people with a desire for immediate consumption, have higher credit card balances.

The conclusion from the study is that individuals who prefer immediate rewards are more likely to borrow.

The paper mentions that credit card debt is different from other types of debt from the psychological point of view, so we should not extrapolate these findings.