Credit Card Hangover

Alcohol + Easy Credit = Big Money
Consumer credit cards are a boon for the bar industry. This realization came to me last night at a friend’s surprise birthday party at a popular watering hole. We arrived early in the evening to gather for the surprise and people-watched as customers trickled in. The vast majority of people pulled out a Visa, American Express, or MasterCard and started a tab.

No Cash, No Pain
People are usually out to have a good time and don’t want to worry about money. Using a credit card makes this easy to do. Psychologically, it’s much less painful to order a refill or another round when a person doesn’t have to plop down the cash. Particularly so when considering that drinks at most restaurants or bars are overpriced. Keeping a tab on a credit card prevents people from realizing their favorite drink costs $6.50 a pop.

Winners and Losers
Obviously this cocktail of expensive drinks, easy credit, and impaired judgment can add up to a huge bill at the end of the night. The house definitely wins on this one. I’d be interested to see a graph that compares the average amount spent on drinks for the 10 years prior to the easy availability of consumer credit cards and the 10 years following. It’s just a guess but I’d imagine spending went up considerably.

Making Others Rich
Lets say you setup a night out with 10 of your friends and everyone spends around $50, you just made someone you don’t know $500. Why not invite your friends over to your place instead and spend $100 getting food and drinks for everyone? You just increased the net worth of your friends by $500, how’s that for an easy way to make others rich? Don’t want to spend the $100 yourself? Everyone brings their own drinks; you still saved everyone a ton of money.

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

All posts by Ben Edwards