What to Say: Credit Card Debt
How to support your loved one as they tackle the emotional subject of money and debt.
How to support your loved one as they tackle the emotional subject of money and debt.
How to support your loved one as they tackle the emotional subject of money and debt.
What we'll cover
Credit card debt is an incredibly common experience for the majority of Americans. According to TransUnion, a credit reporting service, the average credit card holder carried a balance of $5,474 in 2022.
In this “What to Say” guide, we’ll cover the realities of credit card debt, what to say to someone with credit card debt and other ways to help.
What it is
Money is an incredibly emotional topic. Despite being an area of life where hard numbers abound, even the financially literate among us usually make emotional decisions when it comes to their money. Studies show people tend to mentally earmark money, adding it to a mental accounting sheet, rather than looking at hard numbers.
For example, a 2019 study of UK credit card holders revealed people pay off non-durable goods (i.e., vacations, food expenses, etc.) faster than durable goods (i.e., a sofa, car, etc.). This choice had more to do with the emotions of the situation (borrowers were more likely to hold onto debt for items that were seen as long-term investments) than any financial sense, including the interest accrued by holding onto that debt.
A 2019 longitudinal study, which followed participants annually from 1979 to 1994 and then biannually thereafter, bore similar results. Financial literacy, again, took a backseat to emotional concerns when it came to debt-holding and asset accrual. Researchers theorize a number of reasons for holding onto debt: to hedge against future income loss, to prepare for bankruptcy, stress mismanagement leading to lower self-control when it comes to spending or to keep hold of liquid assets for cash-only expenses. Whatever the reason, those hurt most by holding onto debt are a varied group, with individual experiences and differences being the determining factor in who was hurt by their spend-save strategy.
Paying off credit card debt
Credit card debt is incredibly common in the United States. Even those with incomes above $100,000 are liable to carry a credit card balance each month. And, during hard financial times, Americans are likely to lean on credit cards to cover their everyday expenses, including food and clothing.
When dealing with paying off credit card debt, the Federal Trade Commission (FTC) recommends contacting the credit card company. By being “persistent and polite,” in the words of the FTC, borrowers may be able to work out a modified payment plan. The FTC recommends doing this work on one’s own, rather than paying a third-party company to work out such a plan on one’s behalf. This kind of personalized interaction, where the borrower explains their circumstances to the company, can also help the company put off sending the debt to collections.
If the person in debt is looking for a credit counselor to talk them through their options and help them navigate the financial system, it is important to keep in mind that most reputable credit counselors work for non-profits. They can be found via credit unions, universities and, in rural communities, through a U.S. Cooperative Extension Services branch.
What not to say
Money is difficult. And most people get into debt not due to a love of lavish spending, but tight financial circumstances. When talking to your loved one about their credit card debt, it is important to be compassionate and realistic.
“It’ll be OK.”
Why it doesn’t work: Credit card debt can cause a lot of pressure for a loved one. Major debt and a resulting low credit score can seriously impact someone’s life. It may be tempting to use this phrase, in an attempt to be comforting, but you might sound dismissive of their concerns.
"You should… stop eating out/invest in this stock/use the bus instead of driving/get a new job."
Why it doesn't work: Lower financial literacy does not automatically equal greater levels of credit card debt. This kind of advice assumes a very low level of financial literacy. Instead of assuming your loved one’s financial literacy is at the heart of their money woes, listen to them and discuss their problems with an open mind.
"Let it go to collections."
Why it doesn't work: Providing bad financial advice is just as off-putting as providing good financial advice. Rather than helping your loved one get further into debt, brainstorm ways you can help them reasonably pay down what they owe.
"Woof. That’s the worst!"
Why it doesn't work: This isn’t a bad place to start, but it shouldn’t end here. You are only acknowledging credit card debt is difficult. Don’t cut the conversation off at the knees.
Nothing.
Why it doesn't work: Finding the right words can be difficult for anyone, but that doesn't mean you should neglect to say anything to your friend or loved one. During especially difficult situations, your loved one will appreciate any kind or reflective words you can offer during their time of need. Saying something—with intention and thoughtfulness—is better than saying nothing.
Instead of avoiding a conversation in a fraught moment, try a phrase like, "I can't begin to know what you are going through, but I am here for you."
What to say
It can be hard to know what to say when a loved one confides in you about such a sensitive subject as debt. These conversation starters can be a good jumping-off point.
Note: These conversation starters are just suggestions. Each individual’s experience will vary and users should measure their words based on what they know and do not know about their loved one.
"I’m so sorry. That’s so difficult. I really appreciate you telling me this. Is there anything I can do to help you get back on track?"
Why it works: Credit is a part of nearly everyone’s life—for better or worse. This conversation starter acknowledges both the difficulty of the situation and the reality of credit. Even those who have gotten out of debt may fall back into it given how our financial system is structured. This helps the person think of their credit card debt as part of an overall financial journey, rather than a hole they have fallen into right now.
"That’s really hard. Do you want me to come over and brainstorm some solutions with you? I can sit with you while you call your credit card company."
Why it works: Showing up is often the best thing you can do for a loved one. Tackling credit card debt can be an emotional journey, not just a financial one. In this conversation starter, you lay out one actionable step for your loved one. This gives them a place to start while you act as a supportive person during their road back to financial solvency. This also lets them know you are aware of the complexity of the situation.
How to recover
If you’ve said something insensitive, the best way to resolve the situation is to be better at showing up. Ask yourself questions that may shape or alter your perceptions of your loved one’s situation. What do you know about credit card debt? Are you financially literate yourself?
Look into the issue of paying down debt. Utilize resources like the Federal Trade Commission’s Consumer Advice site, talk to professionals at your local credit union branch or read one of the reputable sources linked below. Think of ways that you could be better at showing up for those you love.
Other suggestions
Debt is difficult to comprehend and can be hard to get out from under once you’re in it. If you’re financially literate, this is the time to utilize your skills. Does your loved one want an overview of options for their debt? Can you help them gather the documentation they need? You can inform them of the potential pitfalls of debt consolidation loans or find them high-yield savings options for the future. You can help them get on a path to rebuild their credit. Ask them what they need from you. Use your skills to help them avoid credit debt scams.
If you’re not particularly financially literate, you can still be of great help.
Money is emotional. Remind your loved one to begin repayments on their highest interest card, rather than the one that causes them the most stress. Help them plan a budget, if they would appreciate that assistance. Help them locate a reputable credit counselor, rather than getting drawn in by a scam. Sit with them when they call credit card companies to try to work out repayment plans. Help them gather requisite documentation as they start to tackle their debt.
Sources like the U.S. Department of the Treasury, Investor.gov, the FTC, the Consumer Financial Protection Bureau and the Office of Financial Readiness can provide trustworthy information on getting out of debt and avoiding debt-related scams.