Why we lie about credit card debt
By Jennifer Nelson
March 25, 2016
While mortgage and student loan debt have been labeled as “good” debt, owing money to credit card companies, not so much.
“If you don’t earn more than you spend, then you’re kind of in trouble,” says Carolyn AlRoy, a New York City psychologist. And when people are in trouble — spending more than they earn or more than they can repay reasonably — they sometimes feel like a failure.
“Debt can be seen as a metric of financial competence,” says Lee Gimpel, co-developer of The Good Credit Game, a curriculum kit for teaching consumers about credit reports, credit scores and credit cards. Even if someone doesn’t actually say you’re irresponsible with your money, that’s a message people hear or perceive.
A February 2016 Prosper Marketplace Survey of 1,000 Americans 18 and over found 60 percent have credit card debt and 48 percent live paycheck to paycheck. According to a CreditCards.com analysis, the average credit card debt is $5,540 per U.S. adult with a credit card.
“The lying we do about debt is to protect our fragile insides from being exposed to ridicule and embarrassment,” says Briana Cavanaugh, a financial coach and accounting consultant at Bliss your Money, which offers training on financial self-care.
“What I find is that people lie about debt because they don’t know what their real debt is.”
— Briana Cavanaugh,
at Bliss Your Money
How can credit cards get you in this situation? Credit cards can make you feel more distant to your money. When you spend cash, actual money leaves your wallet. But with plastic, after a few purchases, you’re not even sure how much debt you’ve racked up on your card.
For some, credit cards can drive people deeper into the debt abyss. And no one wants to admit they’ve fallen down a financial rabbit hole.
Here’s a three-step plan to help you climb out of your card debt:
1. Find out exactly how much you owe.
“What I find is that people lie about debt because they don’t know what their real debt is,” says Cavanaugh.
You have to actually go out of your way — check online balances, open statements, and get out a calculator — to tally your numbers.
So start by taking a measure of your debt. How deep are you in the hole? That will help you see the rungs of the ladder to help yourself climb out of debt.
2. Turn to a friend or pro for help.
Lying about card debt can keep people from investing energy to improve their financial situation. “Very often they are not just lying to other people, they are lying to themselves, and this denial prevents them from taking positive action,” says AlRoy.
However, as with other life challenges such as eating better and exercising more, it’s helpful to have someone to cheer you on, offer constructive advice or to just hold you accountable.
You need to find someone who can really hear you and help. AlRoy suggests connecting with people in the same situation, working with a psychologist who specializes in money issues or a financial expert such as an adviser with the Consumer Credit Counseling Services (CCCS), a free, nonprofit debt counseling and management service. A self-help group or a Debtors Anonymous meeting also can provide insight.
“Once you get in debt, usually there’s a repeat offense.”
— Carolyn AlRoy,
in New York City
Why Debtors Anonymous? “Once you get in debt, usually there’s a repeat offense,” says AlRoy. It’s like an addiction. A lot of people’s stories include getting mired in debt, digging out of debt, and then getting stuck in debt again.
If you’re in debt because of a layoff or a medical issue — something totally out of your control — admit your debt and start erasing it. If chronic overspending led you into debt, find out why. Do you overspend to impress friends or make yourself feel better? You’ll want to recognize the cycle to prevent it from happening again.
3. Plot your debt payoff strategy.
After you own up to somebody and turn to someone you trust for help, find a way to straighten out your finances. You will need to choose a repayment plan — the snowball and avalanche methods of tackling debt are two of the most popular. Pick a plan that works for you.
And plot a debt payoff strategy. This all starts with a budget. If you don’t have one, track what’s coming in and going out and come up with a plan to come up with extra funds to pay down your debt by either cutting expenses or bringing in more money — or both.
Putting your financial house in order starts with dealing with whatever lies you’ve told to hide your debt, getting a handle on how much you owe and then doing something about it. And, don’t forget to put in place measures so that you don’t get in the same debt cycle again.