Credit Card Cashback: Shopping too much in the name of cashback? Ignoring ‘these’ things can be costly

• Shopping too much in the name of cashback?
• You will get completely entangled in the rewards net
• How to save yourself from the trap?

Credit Card Cashback:In today’s digital age, everyone is using credit cards extensively. Moreover, some individuals seem to get completely caught up in the web of ‘cashback’ and ‘reward points’ associated with these cards. The reason behind this is that ‘cashback’ and ‘reward points’ on credit cards are no longer just promotional or promotional offers; So they have become a part of modern buying and selling psychology. So, let’s find out exactly how ‘cashback’ motivates us to spend more.

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1. The lure of ‘free’ things becomes a problem

In this context, some psychologists believe that the moment we spend actual cash, our brain experiences a sensation similar to actual pain. Conversely, when we use a credit card, this painful sensation seems to lessen somewhat. Moreover, the attraction of ‘cashback’ creates the chemical ‘dopamine’ in our brain; Which makes us feel like we are going to get some extra money.

2. Understand the Minimum Spend Condition

On the other hand, most credit cards offer customers a cashback of ₹500 on a total purchase of ₹50,000. But in the name of saving ₹500, you often end up losing much more than that. Sometimes this loss even reaches ₹1,500. For example, if your actual requirement is only ₹3,000, you might start buying another ₹2,000 worth of goods without any serious thought just to get that ₹500 cashback. It is often later that we realize how big a mistake we have made.

3. Fear of ‘missing out’

Moreover, limited-time offers rarely give you the opportunity to think in detail or brainstorm for long periods of time. This creates a kind of urgency in our minds; You start to feel that if you don’t buy the item immediately, you will lose the cashback completely. In our haste, we buy things that we don’t really need. We often overlook this fact.

4. The Vicious Cycle of Credit Card Debt?

The real danger of cashback gradually starts to emerge when you spend more than your budget in the name of getting rewards. For example, if you fail to pay your credit card bill in full at the end of the month, the bank charges you interest on the overdue amount at an annual interest rate of 36% to 45%. In such a case, even if you get 2% or 5% cashback, that cashback becomes completely insignificant against the burden of such exorbitant interest rates and is practically worth zero.

How to save yourself from this trap?

To avoid this dangerous cashback trap, think carefully before buying anything. Not only this, but never forget to make a shopping list before buying anything. Cashback can be a great option only if it is used properly.

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