The Psychology of Spending: Save Big by Carrying Big Bills

It seems it really is “all about the Benjamins.” A new study published by the Journal of Consumer Research,“The Denomination Effect,” has proven that people who carry around large bills (like the $100 bills with Benjamin Franklin’s portrait) are more likely to be more cautious about their casual spending than those who carry the same $100 broken out into multiple smaller bills.

In today’s economy, the need to be conservative with our spending is constantly tempted (and often thwarted) by the countless clearance sales and unbeatable prices we see as we walk past store windows or surf the web. As a result, it’s incredibly easy to stumble into a series of dropping a single $20 at one sale, and another $20 at the next and so on, until all that bargain shopping adds up to serious spending. (Even if you’ve saved over $100 with price reductions, you’re still chipping away at your savings.) And therein lies the problem, it’s easier to part with those twenties than it is to break a hundred dollar bill.

Looking into the psychological aspects of spending, the study concluded that people have come to overvalue large denomination bills, and undervalue small denomination bills. While you may be willing to part with a ten dollar bill without hesitation, the impulse to spend the same ten dollars is checked when it requires breaking a bill with a larger denomination even if the spending is exactly the same.

But why are we so wary of breaking the big bills? It may be something as simple as not wanting to cram our wallets with all the smaller bills, or it could be our awareness that once that $100 bill is broken, we’re much more likely to start spending those fives, tens and twenties on smaller purchases that could easily be thought of as impulse buys.

Don’t have $100 to begin with? It works the same with much smaller figures too. In the study, 89 undergraduate students (the ultimate bargain-hunters, eaters of instant-Ramen and saddled with student loans) were given a single dollar to spend at their will. About half were given a crisp single dollar bill, while the other half were handed 4 shiny quarters. The results? 26% of the students who carried the single bill broke it and spent it, while 63% of the students carrying coins fixed their sugar cravings and bought candy.

So if you’re looking for new ideas to curb your spending, try carrying cash (it’s much easier to SEE how much you’re spending when you watch your wallet shrink than when you swipe a piece of plastic), and try carrying big bills. Most importantly, learn to value your money properly. Ten dollars is still ten dollars as a single bill or as one of ten that you get back after you break out Benjamin Franklin.

5 Best Ways to Use Credit Cards

It’s no secret that credit cards can cause grief with pesky finance charges and penalties; however, there are instances in which credit cards can improve your live. Consider these five ways to take advantage of your credit card in a great way.

1. Larger Purchases or Buying Online
   When purchasing larger items or buying online, a credit card can benefit you greatly, especially if you want to make a return. The paper trail inherent in the process shows just how much you spent, and leaves little room for dispute when you ask for your money back.
2. Using While Traveling
   When traveling, credit cards can come in very handy. While cash is often impossible to retrieve, if a credit card is stolen, it can be controlled from the company office to stop purchases or return money spent maliciously.
3. Relying Upon During Emergencies
   There are times when pulling out plastic in the midst of an emergency is necessary, especially if you have no cash. For instance, if someone has to go to the hospital, or you find yourself in a car accident, making charges on your credit card can save a life.
4. Helping You Stick to a Budget
   Going through those old credit card statements can help you budget well for the future. By looking through all of your purchases, you can make more informed decisions on how to spend moving forward.
5. Taking Advantage of Rewards Systems
   If you want your credit card to provide you with a financial benefit, it’s good to take advantage of reward points that you can redeem for travel, merchandise, or cash.

Credit cards definitely can cause a great headache when people don’t think twice about their credit card purchases. However, if they are managed wisely, they can very easily help you to help your credit history and help you to secure big loans.

Is there an instance where you find credit cards especially helpful?

Denver Credit Card Rates

Taking your family to Aspen for Christmas and New Year’s sounds fantastic, doesn’t it? The slopes are only a few hours away, and the village is enchanting at that time of year. But it comes at a price, for sure. The best credit card rates could make a ski vacation cheaper in the long run–something that will go a long way in justifying the expense. Denver Banking Rates is the place to go to find low rate credit cards for your needs.

Even if you forego Aspen and just stay home this year to enjoy the annual channel 9 News Parade of Lights, finding the lowest Denver credit card rates could make the holiday spending easier.

Credit Cards and Improving Your Credit Score

Having at least two credit cards and keeping the balances low compared to your limit will help to improve your credit score. Make regular, on-time payments to your account and it is likely the credit card company will increase your limit. Lenders like to see high limits with low balances, because it demonstrates you are trustworthy and responsible.

If you have a low credit score, especially lower than 600, you may want to quickly get a copy of your credit report and see where you can improve your score.

Before you apply for a Denver credit card, be sure to get your free credit report.

For help with improving your Credit Score, you can visit www.GoLookOnline.com

Types of Credit Cards

Denver Banking Rates provides consumers with the tools and information they need to make the soundest financial decisions. One of those decisions is opening the right type of credit cards. Depending on your credit history and income, you can qualify for a variety of types of credit cards.
Common types of credit cards:

• Secured credit cards
• Unsecured credit cards
• Reward Credit Cards
• Debit Cards
• Prepaid Credit Cards
• Travel Rewards Cards

There are also different payment options for credit cards. You can make a minimum monthly payment, get a prepaid card, or pay your card monthly in full. No matter what type of credit card you seek, Denver Banking Rates can help.

Getting a Low Denver, CO Credit Card Rate

Denver Banking Rates recommends that you only spend what you can afford each month, but if you do find yourself not being able to pay your full credit card balance each month, then use a Credit Card with the lowest possible interest rate. Some Credit Cards may offer a much lower interest rate without all the extra perks and cash-back bonuses. These benefits may be great, but if you know you will be paying interest each month, work with the Credit card with the lowest rates.

If you have managed your credit well, getting the lowest credit card rates will be easy. If you’re like many consumers today, it is likely you have late payments, have gone over your credit limit in the past, or have had credit card balances that are too high. Denver Banking Rates will help connect you with the best credit card companies for the most competitive rates.

Credit Card Fraud in Denver, CO

Denver Banking Rates works with Credit Card companies who spend a great deal of money to help protect against anyone trying to steal your credit card. Credit Card Fraud is unfortunately a wide-spread problem, and the best companies continue to improve their security to protect you. As they continue to work hard with our customers and the credit bureaus to prevent and reduce credit card fraud and save money, the lower credit card rates for consumers will go. Be sure to protect your identity and monitor your credit card activity to prevent identity theft, and catch it early in the event that it happens to you.