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Why we overspend to earn rewards points
– moneysense.ca
Even the most financially disciplined person might catch themselves chasing rewards from a credit card or loyalty rewards program. It’s not just you or a lack of willpower; credit card issuers and retailers design rewards programs to tap into the psychology of spending.
Research shows that people tend to spend more when using credit cards, make more impulse purchases, and even leave larger tips. Rewards programs can reinforce those habits since each purchase feels like a step towards something valuable, which can make it harder to stick to a budget.
The good news is that being aware of how these programs influence your behaviour can help you decide whether you need a purchase or whether you’re shopping just to earn rewards.Plus, we’ll show you how to make the most of rewards programs without going into debt.
The psychology behind spending
Have you ever noticed that if you have a reward offer, you end up spending more than you intended, even if you’re getting a discount or earning points? That the overspend effect…
