What enabled me to make that purchase was a credit card. I could have gone debit, but I'd rather not involve my checking account at this time of the month; I needed to be able to put off the reckoning of my overpriced ticket. (At least I didn't "upgrade" to 3D.) Which goes to show what Derek Thompson argues at the Atlantic: "Yes, Credit Cards Are Making You a Bad Person" -- "dumber, fatter, poorer," like some nightmarish Daft Punk song.
The utility of credit is obvious. As Thompson puts it: "People rarely spend exactly what they earn, exactly when they earn it. With savings, we pass today's earnings to the future. With credit, we pull expected future earnings into today." Sounds like an effective way to leverage earning power and allocate resources. But in practice people underestimate how much they ought to save and overestimate their ability to pay back debts on time. The result is often financial havoc, and potentially other personal problems, as studies cited by Thompson suggest.
According to two MIT business professors, "Framing hypothetical purchases as credit card payments may significantly increase likelihood of purchase and willingness to pay." Their example was an auction for Boston Celtics tickets in which people using credit outbid cash controls by nearly 100 percent.
Beyond this tendency to overspend, research points to some other surprising consequences of cashlessness. For instance, the finding that people pay less attention to what they're purchasing when they put it on plastic, and even have more trouble remembering what they've bought. Or that the ease of credit credit card transactions might subtly reduce consumers' inhibitions about what sort of food to buy, thereby impacting health.
The commonsense approach to using plastic is to pay one's balance in full each month, building good credit and accruing rewards while avoiding interest payments. (And hopefully not gaining weight or losing one's memory.) But the banks don't really want their customers to do this, since late-payment and interest charges are among their favorite ways to make money. So, for instance, even a transaction that exceeds a user's credit limit can be approved, turning a customer into a profitable debtor. Other techniques include confusing procedures for redeeming rewards on cash-back cards, which can mislead users about what they stand to gain by charging things. A potentially unhealthy relation between banks and their customers is just one more deleterious side-effect of credit cards, it seems.