With a credit card in the palm of your hand, it’s tempting to think you’re just spending your money at the store, saving some cash for the weekend.
But the truth is, you’re actually carrying a ton of cash.
A new study suggests that if you’re carrying a lot of credit cards, it may be more profitable to use your cash to buy a car or rent a house, than to use it to pay your bills.
The research was done by researchers at the University of Wisconsin-Madison, the University at Buffalo and the University in Colorado Springs.
“We looked at whether people were carrying a credit or debit card when they purchased something and how much cash they used,” said Michael R. Johnson, a doctoral candidate in economics at the university and co-author of the study.
“And if you are, then it makes sense to spend a lot more of your credit card money to buy something like a car rather than just using it to buy gas.”
The researchers looked at data from the American Community Survey, which has collected data on the income, education and financial status of people living in the United States.
For instance, the survey found that nearly half of adults in the survey were living paycheck to paycheck and more than half had student loans.
The researchers compared this data with a survey of people who had no credit card debt, which is the data set for this study.
And they found that if people who carry a lot credit card cash actually spent more money to pay their bills, they had a greater chance of keeping a car.
They also found that those who carried a lot debit card cash spent less money than those who had little.
“We think this is an important finding because it suggests that there’s a relationship between credit card use and financial stability,” said Daniel E. Smith, a professor of economics at Wisconsin-Buffalo and a co-director of the Center for the Study of Financial Institutions.
He said that the findings, which he presented in an academic paper, may help explain why some people may have an inflated credit card balance and are unable to make payments on their debts.
“If a credit limit is too high, people may not be able to make a payment,” Smith said.
There are other things that may make a difference, including whether the cards you carry hold more cash, whether you’re borrowing on them or if you buy a loan or other credit.
If you think you may be carrying a high credit card amount, Smith recommends checking with your credit provider to see if it might have a negative impact on your credit score.
It’s important to remember that the research didn’t look at whether the credit card users had the credit cards or the debt, Smith said, “It was looking at how much they used their cards when they did buy things.”
He added that if a card was purchased for $2,000, but you only borrowed $1,000 for the purchase, it might make sense to take out a loan.