People can feel a lot of shame about being in credit card debt. They think it means they are bad with money. That it’s something to be avoided, or a burden they can never live off.
But for financial educator Rita-Soledad Fernández Paulino, founder of Wealth for allwe should just look at the debt for what it is. “This is exactly what we use when we don’t have access to cash reserves,” she says.
And unfortunately, our assumptions and emotions about debt can prevent us from managing our money with confidence. she said. They can prevent us from being honest with ourselves about our financial situation, getting the support we need to pay off our debt, or even leveraging debt to our advantage.
Here are three common myths about debt and how they can affect our finances.
Myth: People in credit card debt are terrible with money
Some people think that those who have debt have a spending problem or don’t know how to budget, says Fernández Paulino. But this is often not the case.
Around 45% of those surveyed a survey on bank rates for 2025 said their credit card debt came from emergencies or unexpected expenses. This includes car problems, medical bills and home repairs.
People also accumulate debt during stressful life events. “Clients who come to me have usually had to deal with the death of a loved one and are struggling with such grief that they have difficulty showing up to work,” says Fernández Paulino. “Or they have medical problems and are in debt to get treatment.”
This is why it is so important to put money aside for emergencies while developing your plan to pay off your debt, she says. If an unforeseen event happens and you don’t have these funds, you may find yourself stuck in another cycle of debt.
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Myth: You should avoid debt at all costs
People may feel afraid or guilty about using a credit card for many reasons. Maybe they grew up in a family that struggled with debt, didn’t talk about finances, or faced bankruptcy or foreclosure on their home, Fernández Paulino says. “They grow up thinking: Debt is the problem, so I’ll never use it.”
Others avoid credit cards because they grew up with misconceptions about debt, stemming from a lack of knowledge about how finances work in the United States, says Fernández Paulino, who works with many immigrants. “So when they start using a credit card, they don’t know how to use it.”
Everyone should have at least one credit card in good standing, says John Kiernan, editor-in-chief of WalletHuba personal finance website. “It sends positive information to the credit reporting agencies every month, which makes your credit report look better and leads to a better credit score, which opens many doors for loans.”
Learning more about how debt works can help you understand how to use your credit card strategically, says Fernández Paulino.
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Myth: Getting out of debt is impossible
“It’s not true that you can’t get out of debt,” says Fernández Paulino. “What is true is that without a sufficient monthly surplus – the money left over after fixed and variable expenses, minimum payments and some savings – progress is slow.”
If you want to pay off your debt faster, focus on “building a surplus so you have significant additional cash to put towards your balances,” she says. This might mean tightening your budget to save more or get an additional source of income.
“When clients build up that surplus, they can quickly make progress,” she says. “I’ve had clients eliminate five-figure debts in six months, others take between 12 and 36 months.”
Your debt repayment schedule depends on three variables: the starting balance, the interest rate, and consistent additional cash flow, she says.
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The digital story was edited by Clare Marie Schneider and Marielle Segarra, with art direction by Beck Harlan. We would love to hear from you. Leave us a voicemail at 202-216-9823 or email us at LifeKit@npr.org.
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