Biggest Debt Stigmas

The American household debt stands at 14 trillion dollars. Mortgage debts are the leading source of American debt, followed by student loan debt, auto, and credit card. With such stats, it’s no doubt that many people are struggling with managing debts and how to adopt positive financial habits. 

Creditors have been extending credit to consumer debtors. For this reason, society keeps stigmatizing those who fail to honor their financial obligations or those who find themselves immersed in unmanageable debts. Scholars continue to ascertain whether this stigma is declining. However, as the consumer bankruptcy filings continue to spike, there are high chances that debt stigma still exists. 

Debt has become a way of life for a majority of adults. People borrow money to attend school, purchase a home, or buy a car. Unfortunately, debts are one of the leading causes of anxiety, depression, and stress. The great news is that a basic understanding of how debt works can help debunk the stigmas. 

All Debt is Bad

All debt is bad for you because it encourages you to spend more than you can afford. They say a little debt doesn’t hurt. But it all starts from here. You find yourself in debt worth thousands of dollars from a simple purchase with your credit card, and before you know it. Debts tempt you to keep spending on new things.

All debt is bad because it costs you money. It only feels free when you are swiping your card, but this can only be an illusion. You have to pay the price for every debt you create as interest. Debt also borrows from your future income. Every time you take out a loan, you borrow from the money you hope to earn in the future. 

No one is certain of what might happen to their income in the future. It’s important to note that if you approach and manage debt wisely, debt can be a good tool to achieve financial goals and suppress the effects of debt stigmas. 

All Debt Hurts Your Credit Score

There is no such a thing as good debt. Debts play a big role in your financial life. Debts affect your spending ability, your ability to borrow money or pay a low insurance rate, and your credit score. The amount you owe goes into your credit score. Your level of debt makes up 30% of your credit score, and paying your loan balances is crucial for your credit score. 

Carrying a lot of debt reduces your chances of getting approval for new credit cards, loans, and an increase in credit limit. However, it’s not all bad with debts and credit scores. If you manage your debt successfully, debt can positively impact your credit score. Bad credit doesn’t have to hold you back from enjoying the benefits of 500 credit score credit cards

Jointly Responsible for Debt

Couples believe that once they get married, they merge their debt load. This is not true. While there may be arrangements for couples to jointly pay down debt, neither spouse is legally responsible for paying off the debt the other incurred before they were joined together. 

Generally, no adult should be held liable for a debt incurred by the other. However, this isn’t true in every state. There are nine states called community property law states that automatically assign ownership of debt to couples once they get married. These states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

If you live in these states, you will be responsible for debts incurred by you as a married couple. You will also be responsible for your spouse’s debt if you put your name on the loan’s promissory note or if you were added as a joint account holder of a credit card. 

Pay Off Debt as Fast as You Can

There are good reasons why you can choose to pay off your debt within the shortest time. Paying off debt fast can reduce the amount of interest over time and help you improve your credit score. However, the best recommendation would be to pay down significant debt while making small contributions to your savings. You can aggressively build your savings once you pay off your debt in full. 

Managing your Money

Handling debt could be easier if credit cards and loans come with a user manual. With debt and managing money, people only see what you allow them to see. There is a lot that goes into managing your money, and it starts with debunking the biggest debt stigmas. 


Sumit is a Tech and Gadget freak and loves writing about Android and iOS, his favourite past time is playing video games.

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