PS: Speaking of the mental component:
I rarely check my credit card balance. So that next credit card bill is kind of always “looming” in the dark during the course of the month. That looming obligation keeps me cautious and guarded about spending too much.
If I used my debit card and had a positive credit balance on my current towards the end of my budgeting period, I’d be more inclined to think “Oh, I didn’t spend much so far and have a healthy balance remaining - I might just blow a bit of it on something…”.
Fees. Banks make much more from credit cards than debit cards. That’s not only due to instalment interest but also because…
“Interchange” fees are higher for credit cards than debit cards (and consequently also merchant fees).