How “doom spending” can accelerate credit card debt

Brian O’Connell
Written by
Brian O’Connell
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How doom spending can accelerate credit card debt

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Maybe you’ve heard of retail therapy, where shoppers hit the mall or their favorite e-commerce site and drop some cash to make them feel better after a tough day.

It was a good rise but retail therapy may be giving ground to a new kid on the psychological shopping block – so-called “doom spending.”

Doom spending means just what it implies. “Doom spending is when people spend more money because they feel an inescapable negativity about the future,” says Jack Prenter, personal finance expert at DollarWise, a personal money management platform.

While retail consumers recognize the red flags that come with a downbeat economy – think inflation, high prices, and robust corporate layoffs – they’re spending above and beyond their financial means anyway.

Why is doom spending so pervasive these days? A big component is psychological. Younger consumers compare their financial fortunes to their parents and grandparents, or even older siblings, and find their cash situations wanting.

“Countless data points show that younger generations have income that’s not kept up with inflation, meaning that they can’t afford the same things that previous generations could,” Prenter notes. “Let’s say you’re a young person saving for a down payment on a house. In that scenario, you might feel like it doesn’t matter if you save $100 per month or zero because a home is extremely far out of reach.”

A doom spender’s biggest financial risks

Loading your front porch with Amazon packages may have its short-term dopamine high, but there are real risks associated with overspending when a straining household budget may not support it.

“Overspending can lead to a handful of different problems beyond simply spending more than your budget outlines, like stacking up credit card debt,” says David Kemmerer, co-founder and CEO of Coin Ledger, a cryptocurrency tax and financial services platform. “Credit card debt is something you want to avoid as much as possible because of the high interest and penalties you can face.”

“Doom spending puts you at risk for a number of issues,” says Caitlyn Eldridge, CEO at Eldridge CPA LLC, a money management company. “At the top of the list is not having enough cash to pay your bills, paying interest on credit cards, and other things that might not have been necessary.”

Spending too freely in the face of adversity can ruin your credit, causing you to have higher interest rates for credit cards, vehicles, or a home, Eldridge notes. “It also takes you further from your goals of being financially free, having a home or retiring early. If left uncontrolled, it will rob you of your future.”

That’s not bothering some consumers who see endless green lights in the retail sector even as more prudent shoppers see red lights.

All told, 27% of U.S. adults are engaging in doom spending these days, according to a recent study by Qualtrics on behalf of Intuit Credit Karma. The spending mindset is most prevalent among younger consumers, with 35% of Generation Z and 43% of millennials engaging in doom spending.

Simultaneously, 56% of the same survey group view inflation as their biggest worry, followed by cost-of-living increases and “unaffordable housing.” Of the 56% of the survey group expressing angst over the economy, 48% say they’re worried about buying necessities like food and clothing and going into personal debt.

The road back from doom spending

There’s no rule that says you have to overspend, especially if your bank account can’t handle the stress.

That’s why recognizing the problem is the best way to start solving it.

“Checking your bank accounts, credit card balances, and future interest payments will shine a light to what is going on,” Eldridge says. “Moving cash out of your bank account that is specifically designated for bills will help, too.”

Applying the 48-hour spending rule can alleviate doom spending, as well. “The idea is to wait 48 hours to go through with a purchase,” Kemmerer says. “You’ll find that after this window of time passes, the desire for the item you’ve wanted to buy also passes, and you’re more likely to choose not to commit to the purchase.”

“It’s a great way to prevent impulse buying and be more intentional with your purchases,” Kemmerer adds.

Prenter also offers some solid tips to eliminate or curb doom spending, especially in terms of credit card usage and credit card debt:

  • Set up automatic credit card payments from your bank account so that your balance is paid off in full at the end of the month.
  • Create a budget and try your best to stick to it. “Give yourself money to enjoy yourself and you’ll be more likely to stay the course,” Prenter advises.
  • Reduce your credit card limits and cancel any cards that you don’t need. “Doing so can be a good way to reduce your spending if you’re struggling to control it,” he adds.
Brian O’Connell
Cardratings Contributor

A former Wall Street bond trader, Brian O'Connell is the author of two best-selling books: The 401k Millionaire and CNBC's Creating Wealth. His work is bylined in national finance and business platforms like, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, Fox News, and many others. Mr. O'Connell is a graduate of the University of Massachusetts and he currently resides in Palmas del Mar, Puerto Rico during the winter months, and in historic Bucks County, Pa., when Mother Nature cooperates.

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