The demonization of debt and its negative impact

Some people believe debt is so bad that they stop spending on eating out to help with their debt repayment. This demonization of debt is hurting people with little or no access to money. Here is the ground reality of debt in America.
The demonization of debt and its negative impact
With the rise of social media as a source of information, it is easy to get carried away in the waves of trends and financial advice that one is presented with. But what is the reality of debt? Read on to find out.
In this article

Beem recently conducted a poll on our social media handles on how people view debt. It was interesting that around 57% of respondents viewed debt as a bad thing. Here are our learnings on the demonization of debt and its negative impact. 14% of them viewed that some debt is good and 29% viewed certain types of debt to be bad. We understand that this might be a small sample and when we searched further we discovered research that showed us that 69% viewed debt as bad to have but a necessity. Interestingly, the report also stated that 79% of Americans feel that they do not use debt in a responsible way.

The common theme across social media always seems to be to tell you that debt is bad to an extent that they have asked people to stop spending on eating out to help with debt repayment. This demonization of debt is hurting people with little to no access to money. Thus, you should take the time to explore your options, compare lenders with Beem, and choose the loan that best fits your needs and financial goals. Here are a few things that can happen as an effect of this demonization.

You learn less about debt when debt is demonized

When debt gets demonized over and over again people tend to not learn anything about it in an attempt to stay as far as possible. Has this helped Americans avoid debt? Let’s crosscheck with some facts:

  • 8 in 10 Americans have some debt linked to them.
  • The credit card debt for an average American household is $14,241.
  • The average student loan debt per household is $58,112.
  • American households have $31,142 in auto loans.
  • The highest loan for American households is $202,454.

Clearly, this demonization hasn’t helped average Americans to stay away from debt because debt has become an undeniable part of our daily lives.

You accumulate more debt when you don’t learn

When you learn nothing about debt because of its demonization you accumulate debt at a faster rate and do nothing about it till it’s too late. The Federal Reserve shares that only 48% of Americans with credit cards pay their bill in full every month. The other 52% are carrying debt and adding to those interest fees worth around $787 billion. Student loans are delaying people from investing in their retirement by 40%. 21% of them even have pushed away crucial life choices like marriages till their student debt is cleared.

Debt affects your mental and physical health

According to the American Psychological Association, money is one of the most significant stressors for many people with 72% of Americans reporting feeling stressed about money at some time. Long-term debt accumulation and chronic stress from debt collectors are some leading factors that lead to the decline of mental health. People in debt are three times more likely to take suicidal choices and hurt themselves. Stress puts more wear and tear on your cardiovascular system. This reduced mental and physical capacity only makes it harder to be productive and find ways to pay back debt. Here’s how you can beat this toxic cycle:

Change your outlook on debt

If debt is that bad, why do the rich borrow money from banks? Take a look at how many billionaires have crazy amounts of debt that will leave you baffled. You have to look at debt from a rich person’s perspective who views it as non-taxable income to invest in more money-making ventures rather than the demon that is portrayed to the rest of us.

Educate yourself on debt

Learn more about the different types of debt including other factors like interest rates and credit scores. Know how much your interest is on your credit card and what the late payment fee on your auto loan looks like. Understand how debt works at both the micro and macro levels of society and everything around us.

Strategize better with new information

With all the new knowledge you have obtained, set a strategy to pay off your different debts strategically. Figure out a way where you can pay the least interest possible. Based on your debt, set long-term and short-term goals to celebrate.

Use knowledge to reduce stress

You don’t have to be miserable because you are in debt. Take opportunities to reward yourself, to treat yourself to a good dinner, nice shoes and for things that you love doing. Plan this effectively to make your debt journey relaxed and not filled with anxiety over its negative impact.

See also About:Debt management plan: Is it for you?

Use debt as a tool to make money

Any debt that you can use to invest and make better returns is a good debt to have. While student loans seem to be a big problem, graduates usually make more salary and have better pay than people who don’t have a degree. This makes student debt considerably okay whereas auto loans are mostly depreciating value.


As a society that is constantly anxious about money and our financial needs, we have to improve our understanding of debt, especially as it becomes inevitable. While the negative impact is evident, dealing with debt doesn’t have to be a bad experience. This will, in fact, help us make smarter money decisions and create a more financially literate America. If you need financial assistance, use the Beem app to get all information on personal loans.

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This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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