11/21/2011 05:04 pm ET

Credit Card Users More Often Ignore Purchase's Downsides: Study

That giddy feeling that comes along with making a purchase and not seeing any money exchange hands isn't in your head.

When consumers pay with credit cards it creates a feeling of euphoria that obscures the cost associated with the purchase, a new study from the Journal of Consumer Research finds. The report, cited by MSNBC, also found that when consumers buy items with cash they tend to focus more on the downsides of the purchase, including potential product flaws.

According to MSNBC, previous research has shown that people tend to spend more when they use a credit card instead to cash -- a phenomenon known as the credit card premium .

Credit card use is widespread across the country. Indeed, as of 2010, U.S. consumers held 609.8 million credit cards, according to a survey by the Federal Reserve Bank of Boston, cited by That's nearly two for every American.

Many of those cards may be being used illegally, however. A new paper found that despite only 27 percent of the world's purchases occurring within the the U.S., the country accounts for 47 percent of global credit card fraud, Business Insider reports.

Americans' debt ballooned in the lead up to the financial crisis, with the total revolving debt increasing nearly five-fold in the two decades leading up to 2008.

Since the Great Recession though, American credit card use has become markedly more conservative. By September 2010, American credit card use had already hit an all-time low.

Slowly, however, Americans have started to swipe more often, with credit card debt increasing substantially, according to a recent study from The good news? Default rates have been declining steadily.

Still, Americans credit card usage may remain a cause for concern. An October study by the Federal Reserve Bank of New York found that most Americans underestimate their levels of credit card debt by roughly a third.

Likewise, recent trends show that credit card companies are targeting customers with lower credit scores, as they are more likely to carry balances each month and pay higher interest rates which boost bank profits.