From a young age, I knew what a burden credit card debt could be. For a time, while my dad was in grad school, my parents supported our family on scholarship money and a carousel of low-interest and balance transfer credit cards. It took them years to pay off the card balances.
But as stressful as I knew the debt was for them, my parents never seemed ashamed of it. They didn’t avoid talking about their credit card balances, and they didn’t shy away from reading their monthly statements. Instead, they looked for the best terms available and focused on paying down the debt quickly. And in doing so, they taught me one of the most valuable financial lessons I’ve ever learned: The best way to get rid of debt is to face it head-on.
But the shame we feel about our debt can make that a difficult task. About 39% of U.S. consumers with credit card debt said they strongly agreed or somewhat agreed with the statement that they felt ashamed of their credit card debt, according to a recent NerdWallet study conducted by Harris Poll. For some, that shame might stop them from negotiating with their lenders or building a debt-payoff plan, options they can’t afford to ignore; the average indebted household carries about $15,355 in credit card debt, according to NerdWallet.
Own the situation
Debt has long been stigmatized, but credit card debt, it seems, is even more so. About 70% of people think that credit card debt carries more of a stigma than other types of debt, the NerdWallet study found.
But shame won’t help you get out of debt faster, says Dr. Brad Klontz, a financial psychologist who studies how people interact with money. In his research, Klontz found that shame was related to a behavior called “money avoidance.” When people feel ashamed of their financial decisions, they might start to ignore their finances, instead of taking steps to turn things around. This isn’t the same as feeling guilty about debt, Klontz notes.
“Guilt is actually really good for you,” says Klontz. “It tells you that you made a mistake and need to fix it. Shame tells you, ‘I am a mistake.’”
That’s where people can get stuck, he adds. Instead of spurring you to action, shame makes you shut down. Relationships can suffer; debts continue to grow.
Because my parents weren’t ashamed of their debt, they were able to pay it off much more quickly. They were always looking for new ways to save on interest, transferring balances when it saved them money.
Twenty or so years later, when I was paying off $12,000 of my own credit card debt, I realized what an extraordinary thing that was. It can sometimes be challenging to look for the best terms when you’re weighed down by a five-figure debt.
Feeling ashamed about debt can come at a high price, says Jonathan DeYoe, a financial advisor and a blogger at Happiness Dividend. In his experience, clients who feel ashamed about their debt are less likely to negotiate with their lenders. Sometimes, they’re hesitant to mention the debt even to him. As a result, they sometimes end up overpaying in interest.
“When you feel shame, you shut down. It’s a closing-in feeling, not a reaching-out,” DeYoe says. “You’re not looking for a way to negotiate, or a way to get help.”
The good news is, getting help may be easier than it seems.
Banks are generally willing to work with you if you’re facing extreme financial pressure and consolidating your debt isn’t an option, DeYoe says. If you call your bank and explain your situation, you may be able to put a temporary hold on payments, late fees and penalties. Agreements like these usually require a lot of paperwork and reporting, and could hurt your credit in some cases. But if it saves you from bankruptcy, it could be worth the trouble.
And you don’t necessarily need to haggle with your creditors to get better terms. If you have a good or excellent credit score, for instance, you could apply for a 0% APR balance transfer credit card online, and move your high-interest balances onto that card without even picking up the phone. Some cards offer 21 months of 0% balance transfer APR, potentially saving you thousands of dollars. Alternatively, you could apply for a low-interest debt consolidation loan, if you’re trying to pay down a larger balance or you want more structured payments. The better your credit score, the lower your interest rate on these loans will be.
Let go of shame
If you want to let go of your shame about debt, you first have to accept that your financial decisions probably made sense to you at the time, given your beliefs about money, Klontz says. That doesn’t mean that you had the right information, or that you made the right decision, he adds, but it certainly means that you can learn from your mistakes.
In a 2008 study, Klontz and a team of psychologists found that people could reduce their sense of shame about debt by figuring out where their beliefs about money came from, and questioning those beliefs.
“A big part of it was cognitive behavioral therapy, where you’re looking at your own beliefs about money like a scientist and asking yourself what’s working and what isn’t,” Klontz says. At the end of the study, patients who went through this type of treatment reported signs of reduced anxiety, including “diminished feelings of inadequacy” and “increased hope.”
If you’re trying to change the way you think about money, you don’t necessarily need to see a therapist. You can start by reflecting on your attitudes toward money and how your financial decisions affect your life. This way, you can separate your self-worth from your credit card balances.
Letting go of shame is difficult. It takes practice. But once you leave the shame behind, you’ll be able to focus on the next step: paying off your credit card debt.
“It’s a matter of pragmatism,” DeYoe says. “It’s saying, ‘I have this debt. I have to deal with this debt. This shame won’t help me deal with this debt.’”
This article first appeared at NerdWallet.