6/23/2011 3:17 PM ET|
Are you addicted to buying stuff?
Those of us who overuse credit cards may do so in the belief that our purchases can transform us. Specifically, there are 4 things overspenders crave.
Carol, a costume designer in Portland, Ore., was addicted to shopping -- and buying. While living in Southern California, she racked up more than $20,000 in credit card debt before she realized she was spending so much simply because it made her feel good.
"I had a compulsion," says Carol, whose last name is being withheld because she participates in a group called Debtors Anonymous, which fiercely protects its members' identities. "There was something inside me -- this little attitude -- that said I could have whatever I wanted whenever I wanted it. I call it the debtors' disease."
Carol is not alone. A study by Marsha Richins, a business professor at the University of Missouri, found that many people who overuse their credit cards and accumulate massive amounts of credit card debt are buying for emotional reasons. They hope that the things they are buying will make them happier, more popular or better equipped to succeed in life. (How long will it take you to pay off your cards? Check out MSN Money's calculator.)
Credit card debt surviving the recession
The Great Recession may have had many people pinching pennies, canceling ski vacations and squirreling money away in emergency funds. Still, despite high unemployment, shrinking retirement accounts and the collapse of the housing market, many of us are still buying stuff -- lots of stuff -- with our credit cards.
The nation's credit card debt tops $800 billion -- or about $9,000 per household with a credit card. And although the Federal Reserve Bank reports that the number of credit card accounts has declined since 2008, we're still putting more than $1.9 trillion a year on our cards.
What's driving all that credit card debt? Well, it could be a sign that the economy is improving and people are showing a willingness to spend again. That's how some economists see it.
It could also be that people are turning to their credit cards to make ends meet, and that would not bode well for them or the economy. According to the Washington State Department of Financial Institutions, about 40% of Americans say they are living beyond their means.
Shopping feeds emotional needs
Richins' research suggests that rampant credit card use could be a sign of psychological issues.
Richins says that some credit card overusers believe that their purchases can magically transform their lives. Unfortunately, any changes are often fleeting, and when they fade, the shoppers find themselves out on another spree -- much like a drug addict looking for another fix.
"For many of the people we studied who overuse their credit cards, making purchases was exciting. When they talk about buying things, their faces light up," Richins says. "These were people who expect magic to happen to them when they buy things."
In Carol's case, buying things with her credit card gave her a sense of self-worth. She says she felt "like an adult, like a real businessperson."
VIDEO ON MSN MONEY
Hey Someone, it's absolutely none of your business what this man spends his money on. You see that pension he has he earned through working. If you don't work you don't get a pension. Maybe you don't like the idea that a person working for the govt. makes a decent living, but guess what, nobody is going to work for free. People like you always whine and complain when govt employees make a decent living because it's your tax dollars that are paying for it. Well, your money goes to pay for lots of things that you need govt related or not. Sorry, but you have to pay for services and that includes firemen, police, public health etc.
I'd be willing to bet you would not be whining about how the money is spent if it was your money and you were doing the spending. Because I'm sure all of the things you spend your money on are essentials and charity...Bull**it. You are the kind of person who believes you and your family deserve the best things in life, but whine like hell when anyone else gets ahead. Whine Whine Whine...Woe is me...Everybody gets ahead at my expense...That's how you sound.
You seem to me to be a selfish, mean-spirited, whiner. If people earned their money through years of hard work, it's none of anybody's business how they spend it or where as long as it's legal. This man probably realized his dogs treated him better than the rest of humanity, so he wisely decided to spend the money on them instead of letting it fall into the hands of selfish, entitled people like you.
I've always shunned govt work for this reason. Whiners like you always think someone owes you something, and you cry cry cry when you have to pay. Personally I'd rather see my tax dollars pay for police, fire, health and other essential govt services that keep my community safe and healthy than to give it to some piss pot CEO or career lobbyist.
I recently graduated from high school and as is the custom got sent a bunch of money from a lot of different people as a congratulations gift. In celebration I went out and bought some clothing and ended up buying six different things plus a book. By the end of it I was both exhilarated and shocked. NO, I was not shocked because I spent all my savings, it was simply that I NEVER go out and buy that much stuff at one time. I go out and buy one, MAYBE two things and that is it. Buying seven different items, over a hundred dollars worth, is the most frivolous amount of spending I've ever committed in my seventeen years of life. And then I compare myself to this girl in the article.
The main problem I see is that these people aren't taught the value of money or the risk of a credit card. If these people had been taught to restrain their impulses and keep their purchases down to one or two items they wouldn't be in this mess.
Another pathetic American woman? That is a harsh criticism from someone who obviously is not in as good a position to take advantage of or misuse credit.
I don’t care about the world struggling. I don’t care about the plight of Africans or anyone else in corrupt dysfunctional countries. I don’t care about millions of American homeowners who are being foreclosed on. Each individual adult is responsible for his or her lot in life with exceedingly few exceptions.
If we Americans elect irresponsible representatives, we have to live with their self-serving decisions and actions or replace them at the next election.
I see absolutely no reason why the USA should assist any foreign country. The burden for doing so costs the average American dearly. Our government exported our jobs and strategic manufacturing capabilities.
That sequence of events brought higher earnings to corporate American, lowered the average American’s standard of living and vastly improved the living standards of those overseas who benefited from those jobs. American taxpayers and individuals like Oprah and Bill Gates are exceedingly generous to multitudes of countries. Africa is the primary benefactor of the latter two philanthropists.
The reality is that most poor countries and poor people are that way because they do nothing for themselves as a whole. Something that John F. Kennedy said rings true for all people and all countries. "Ask not what your country can do for you, but what you can do for your country."
Helping people does them a disservice. It deprives them of the incentive to do what they have to do to improve their lot in life. It is a cruel subversive crime. It steals self-respect and pride of accomplishment.
Drives when nuts when people like this complain about government officials not fixing our economy when this is how it is actually destroyed. Unsecured debt, charged off to a collection agency who most likely won't get there money.
At least they get a bad credit score in return.
You used the wrong for of "There pet dogs..."
it's, "Their pet dogs..." Just bustin balls
How sexist is this Richins chick. Yeah, I called her a chick. She is excessively focused on proving the dysfunction of men while ignoring who really over shops.
Yes, even if you are broke, you can take your kid to a ball game for 50 bucks. it is a magical experience he will treasure with you and you can't get that time back.
Funny how the only real world examples she could find were WOMEN.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
RECENT ARTICLES ON CREDIT CARDS
'We are sitting ourselves to death,' a doctor says in a new book, and obesity isn't the only risk.