No, Credit Cards Aren’t Making You a Bad Person

Do bad habits make bad people?


The Atlantic‘s thoughtful business editor, Derek Thompson, has an article out titled “Yes, Credit Cards Are Making You a Bad Person.” The subtitle, “Dumber, fatter, poorer” provides a pretty good indicator that the headline isn’t supported by the argument to come.

In a nutshell, Thompson lays out a case, citing  research conducted over the years, demonstrating that people who use credit cards tend to buy more, tip more, and otherwise be less thrifty.  That poor people, especially, can get into trouble by confusing “the ability to spend money and the means to spend money.” Those who buy groceries with plastic are more likely to buy unhealthy food. Further, because credit card companies impose a fee on merchants, their use means everyone has to pay higher prices.

But in what world does any of this have to do with being a bad person?

Personally, I tend to tip more when using cash than when using a credit card, mostly because it’s awkward to ask for a couple dollars in change. So, cabbies, bellmen, and barbers–about the only people I tip with cash–tend to get a higher amount than waiters and others that I tip via credit card. I tend to round up my bill and tip 20 percent at restaurants, whereas a $15 cab ride tends to net the cabbie a 33 percent tip when I hand him a $20 and tell him to keep the change.  Be that as it may, why would tipping more because using the credit card makes you feel flush make you a bad person? I’d think short-changing the waitstaff after looking in your billfold and being reminded you shouldn’t be eating in restaurants would be worse.

Similarly, I’ve had credit and debit cards pretty much my whole adult life and have always been a “pay in full every month” kind of guy. Even in the days before I put practically every purchase on a card, I would write out a check for things like groceries. So, I’ve never really lived in a cash economy to know what I’d spend or what I’d purchase otherwise. Regardless, why would buying a couple extra tins of Pringles and taking advantage of the Buy 2, Get 1 Free offer on Ben and Jerry’s make me a worse person than the guy who’s got a basket full of locally sourced organic produce?

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Ben Wolf says:

    I assume Thompson is arguing that using plastic rather than cash makes people less likely to do the work of tracking their spending, which is probably true to an extent. Otherwise the title and theme of the article do seem an exercise in hyperbole.

  2. James Joyner says:

    @Ben Wolf:

    I assume Thompson is arguing that using plastic rather than cash makes people less likely to do the work of tracking their spending

    Oh, I’m sure that’s true not only generally but of me in particular. But why not “Credit Cards Are Bad For You” instead?

  3. Ben Wolf says:

    @James Joyner: I can’t argue with your point. Maybe “Credit Cards Make You Evil” is expected to pull in more readers. Catchy, but not really accurate or helpful.

  4. JKB says:

    I’m not sure what his point is. He seems to have wanted to write about how terrible credit is but needed a hook. And, credit cards amplify your bad habits just didn’t seem like it would draw eyeballs. Better to blame credit cards for you bad habits.

    Credit cards are tools. Hammers don’t make people bad. But give a hammer to someone with a tendency to hit people in the head and at some point others are likely to label that person as bad since hitting someone in the head with a hammer is much more damaging than hitting them with a rolled up newspaper.

    Still, like most pundits on the abandonment of paper money, he misses one important point. Credit/non-cash economy dies when the system goes down. No power, no comms, no sale. Cash survives because it is asynchronous and is backed by the full faith and credit of the national entity, although the latter is getting weaker by the day.

  5. Rafer Janders says:

    @Ben Wolf:

    I assume Thompson is arguing that using plastic rather than cash makes people less likely to do the work of tracking their spending, which is probably true to an extent.

    I track my spending far more when I use plastic than with cash, for the simple reason that my bank’s web page has a helpful “Transactions” section which allows me to categorize and subcategorize (i.e. I can categorize a charge as “Transportation” and then further break that down into “Taxis”, “Subway”, “Airplane”, etc.) what I spent money on on a monthly basis and then puts it in a lovely little pie chart. (Mmmm…pie chart….gurgle gurgle gurgle….)

  6. john personna says:

    Perhaps you pick up on one aspect of the irrationality that is positive, that paying with plastic allows people to tip (altruism) higher as they also increase their consumption (gluttony, etc.)

    But he certainly has the behavioral economics down.

    The experiments isolate that plastic reduces the “pain of paying” and allows people to blow their budget more easily.

    This related article is getting wide play:

    Conventional wisdom in the 1990s told people saving $1m would be enough for retirement – today, that’s not enough

    If you’ve got millions saved, and are making rational plastic expenditure on top of that, all good.

    But “paying off every month” is not actually the rational economic test.

  7. Pinky says:

    I think you’re asking a philosophical question: namely, do bad habits make you a bad person? We aren’t the sum of our habits, but I would agree that of two otherwise identical people, the one with more bad habits is the worse person.