Cruel Facts Of Black Friday: Retail Therapy And Personal Credit Crisis
November 20, 2022, 2 years ago
What are you going to buy on Black Friday this year? Have you already done your early Black Friday shopping at the end of October? Please try to look back on Black Friday a few years ago. Have you used your credit card to buy items you can't afford? What did you get from shopping?
Do you really get lasting happiness from shopping? Maybe some people will say "I do feel happy, and I buy everything I need", then I really admire you because you are not seduced by the shopping spree.
Retail Therapy Can Leave "Sequelae"
According to a survey from CouponBirds (conducted October 2022), many people admit they buy things to feel better, which is called "retail therapy". Of those, 15% said they would go on spending spree even if they couldn't afford it; 45% would prefer to lift their mood by shopping rather than exercising. It shows that people feel happy during the shopping process. Compared with exercise or meditation, shopping and eating are a quick way to get pleasure but there are often "sequelae".
A survey found that overspend on Black Friday brought regret (39%), stress (51%) and serious financial consequences (41%) to a large proportion of shoppers. Some people say they lose sleep worrying about overspending.
What Makes People Shop Uncontrollably?
The reason could be credit cards. But is this really the case? The essence of a credit card is to use your credit and expected income as collateral to get early access to future income. Credit cards do give some people the flexibility to use their funds and help them get through tough times and seize opportunities like student loans, mortgages, etc. Because these loans meet fundamental needs, they can bring tangible benefits to borrowers.
There is nothing wrong with credit cards. The main reason is that people often cannot rationally evaluate themselves and make spending decisions that are suitable for themselves. In recent years, the Internet has made the advertisements shot by ordinary people more convincing, online shopping has become more and more convenient.
Product iterations are getting faster and faster, gradually amplifying people's needs, such as electric toothbrushes, air fryers, new brand skin care products and cosmetics, new clothing and co-branded limited edition. The lure of consumption is everywhere, especially through increasingly natural video ads, making many people think that not buying is a loss and creating a strong desire to get it now. This further exacerbates people's shopping impulses.
Amid such an unstoppable trend, credit cards have become a consumerism booster by giving ordinary people early access to something. The policies of banks and online shopping platforms have made it more and more convenient to apply for and use credit cards. Society is giving the green light to credit cards. Ultimately, people become deeply in debt because they cannot resist the temptation of the environment.
A survey of 600 American adults aged 18 or older shows how people use their credit cards (polling company Pollfish conducted in 2018):
● 57% said they will primarily use credit cards to make purchases.
● 37% said they would mainly use cash.
● 63% said using a credit card would encourage them to spend more.
● 44% used their credit card to buy things they couldn't afford on Black Friday.
There was no COVID-19 in 2018, the duration of Black Friday has not been extended to October and connected with many festivals, logistics services were not as convenient as they are now, and short videos have not yet emerged. If it were now, would more people say they buy things they couldn't afford on Black Friday?
Short-Lived Happiness Brings Credit Crisis
If the use of credit cards does not exceed one's ability to pay debts, then it may be reasonable, promoting economic development and renewal of household products. However a survey found that only 37% plan to pay off their credit card debt with first statement. 22% plan to pay off debts in 5 to 24 months, the second-largest percentage.
Source: Nerdwallet.com
The survey reflected the fact that 29% of holiday shoppers who used credit cards to buy holiday gifts last year (more than 35 million Americans) have still not paid off those balances. Of the millennials who put holiday gifts on a credit card last year, 34% are still carry this debt.
This shows that a considerable number of people are not realistic enough about their future expectations and lack comprehensive consideration of their ability to repay debts. To put it bluntly, people are already carried away with joy and confidence in themselves when they confirm their orders on their phones.
The figures of discount are displayed on the screen, which makes it clear to shoppers that they are getting what they want for less money. "This is a huge profit. I'll never get a deal like this again," they thought. Check out without hesitation.
At this time, they no longer soberly think about what will unexpectedly break their repayment plan in the future, such as unemployment, rent, illness.
How to Avoid Overspending During Black Friday?
Some regard Black Friday as a consumerist conspiracy by merchants and advocate the Buy Nothing Day, which falls on the same day as Black Friday. During these 24 hours, do not spend money on shopping, not browse online shopping websites, and not go to retail stores.
This is a very extreme method that is difficult for the ordinary people to follow, but there are other better ways to avoid overspending.
1. Take advantage of Black Friday
● Stick to budget. Remind yourself to stick to budge by writing sticky notes, changing phone backdrop, and asking a friend to haul you.
● Find out in advance about discounts on the products you want to buy.
● Add items to your cart ahead of time, set an alarm to catch limited-time offers after you've confirmed overall information.
● After placing your order, do not open the shopping app again and avoid browsing any product pages.
2. Participate in Buy Nothing Day
● Read books related to personal finance and economics.
● Learn about investment funds and make a good pension savings plan.
● Play sports and go hiking without looking at your phone.
If you can do this, you will be more successful than many people in controlling your desires and money. Hope these research data and tips help you stay within your budget this Black Friday.
