Credit cards effectively give people interest-free loans (for those who pay their bills on time), which in part explains why people would pay extra to use them. But the amount of overspending they induce more than eats up any financial gain from an interest-free loan. Essentially, using a credit card means agreeing to pay a hefty tax to make transactions seem less painful. No matter how much rationalizing one tries to do—”But I get so many frequent-flier miles from my card!”; “But I can always pay my bill!”—the overspending induced by a credit card will, except in tandem with the most un-fun, disciplined rules, outweigh its perks.

Consumers fancy themselves immune to this financial anesthesia. But study after study has documented credit cards’ ability to get people to spend more than they otherwise would, even when cash, credit, and debit were randomly assigned to experimental subjects: Credit cards make people more likely to forget how much they spent on something. They make frugal people spend recklessly. They make people willing to spend a lot more on one-off purchases. And large credit limits promote the illusion that daily purchases are inconsequential.