Are you using credit cards to boost your self-esteem?

A recent article on reveals that many young adults get an intense adrenaline rush when using credit to finance the lifestyle of their dreams.

Access to credit makes them feel they have prepared to meet the challenges of the future, the article suggests. The article is derived from the recent study performed by Ohio State University: Youth debt, mastery, and self-esteem: Class stratified effects of indebtedness on self-concept.

The study concluded that when young adults who are from poor and middle class backgrounds used student loans and credit cards to finance their lifestyles, "they felt a temporary but powerful boost in self-esteem and in feelings of mastery over their environment."

The results of this study aren’t surprising. Young adults have the second highest bankruptcy rate in nation and the average indebted young adult spends almost 25 cents of a dollar on debt payments, according to a study by Demos.

While having and using credit is useful, measuring your self-worth by your credit limit can lead to a burden of financial turmoil.

Below are five ways to use credit responsibly and establish healthy financial habits to insure financial wellness later in life. Besides, one of the best self-esteem boosters is providing for your financial future and building a solid nest egg.

  1. Only purchase items on a credit card you can afford to pay back within three months. For larger purchases, consider saving for it or commit to a strategic payment plan if using credit is necessary.
  2. Don’t exceed your credit limit. Most financial experts, such as Money Management International, recommend not using more than 30 percent of your credit limit. Anything over that can lead to a mountain of credit card debt.
  3. Pay more than the minimum amount due. I once read that to pay off a balance in a reasonable time frame and avoid excessive interest is to multiple the minimum payment due by three and pay that amount.
  4. Don’t miss a payment. Do whatever you can to remain current on bill payments. Consider using calendars, agendas, and to-do lists to remember credit card due dates. Missing a payment can lead to late charges and other fees.
  5. Know and understand the interest rates on each credit card. Make sure you are aware of interest rates, over limit fees, rewards and points, etc. Understanding you terms better you will help you make better financial choices.

If you are dealing with using credit card to boost self-esteem, you might also be interested in reading From spendthrift to saver to learn the warning signs and get solutions to control shopping temptations.


Renee McGruder is a former communications coordinator and grant writer at MMI.