Oxthink

I have a rather unusual financial guardian. It protects me from misusing, abusing or overusing my credit card. It operates as an effective form of credit control, constraining my spending.

As such, it ensures I live within my means, don’t run up debts, and only purchase things if I have the money to buy them. It also means that I don’t tend to use my credit card for extravagances or for buying things on a whim.

My trick lies in how I perceive my card and the credit facility. It’s basically an attitude of mind – a psychological restraint.

My thought process is this: when items are bought on a credit card, I feel like I’m paying for them twice; once when I actually purchase the item, and secondly, when I pay the credit card bill, a month or so later.

Now, being a saver by instinct (others might call it being tight), I don’t like spending money. For me, it’s an unpleasant experience. So, the thought of putting myself through two lots of pain rather than just having to suffer the once really doesn’t appeal.

That’s why I’m always reluctant to buy things on my credit card. Spending money hurts; spending it twice on the same thing hurts doubly.

Expenditure on items such as bills, insurances, licences – things that have little physical representation – is particularly irksome to me. I don’t like paying for them in the first place, so to feel that I am paying for them twice is even more distressing.

Paying for an item with cash or a debit card means it is over and done with straight away. The transaction is immediately finalised and consigned to history. I might not have liked spending the money, but I can, at least, now forget about it. I can put it behind me.

In contrast, credit card purchases linger. They can feel like a torturous pain as, faced with the bill, I am constantly reminded of their presence. It is only when they are paid off that I am released from their hold.

For somebody who doesn’t like spending money unless they have to, you might think that using a credit card would be an appealing prospect – I’m not actually parting with any money. It’s a delayed payment. I can pay off the purchase at some point in the future. I can keep my money for that bit longer.

But for me, I know what it really means. I know that I will eventually have to pay. I know that it means two lots of pain, and I would much prefer to suffer only once.

Any credit card bills I receive are paid straight away, before any interest charges are incurred. If I were in a position where I couldn’t pay off the full bill each month, then that credit card pain would be even more agonising, those credit purchases even more resented.

Of course, if I did need to take advantage of the extra repayment terms offered by my credit card, I might not be so psychologically prudish.

My psychological restraint remains strong even in the face of temptation:

• Retailers seek to lure me into making purchases – with attractive displays, promotional offers, and enticing ads. I can buy now and pay later. They make it so appealing, so easy.
• My bank even offers me reward points for using my credit card. Such points are effectively a discount on my purchases. But I am still not persuaded. It seems that it is not incentive enough to offset the thought of that twofold pain.

Admittedly, I do use my credit card for certain large purchases, but only to take advantage of the better consumer protections it offers. Even then, I am not comfortable with it. It’s always a relief when the card is paid up, and the amount owing is returned to zero.

Strangely, other debts don’t seem to instil this angst. With a car loan or a mortgage, I’m not so aware of the debt. The repayments are automatically taken from my bank account each month. They’re just another monthly expense. They’re not something I think about too much. But with a credit card, it doesn’t feel the same; there is a recurring anguish.

When considering this psychological credit card distress, I did think the issue might be the thought that if I hadn’t paid for an item, I might not feel it belonged to me and shouldn’t use it. What if I bought something on my credit card and it gets damaged before I’ve paid for it – how would I feel then? Even worse, what if I buy my weekly food shopping on my credit card – I will have eaten it all before I’ve paid for it. I wouldn’t feel comfortable with that – having to pay for something that I no longer had possession of.

Maybe I’m just a bit old school. I haven’t embraced new financial attitudes and more modern ways of managing my finances. As evidence, I do confess that it has taken me a while to get used to contactless payments rather than using notes and coins to buy things.

Yet, I have to say, even if it is a bit of an old-fashioned attitude, this psychological phobia has served me well. It has ensured that my credit card usage has been moderated and hasn’t gotten the better of me. I am fully aware of the implications of any purchases I make with it. I know there is always a second pain that will follow.