Common Debt Myths That Keep You from Enjoying Life

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Last updated on November 3rd, 2020

Debt is something from which millions of Americans suffer. Fortunately, debt doesn’t need to be a burden that keeps you from enjoying life. Reclaiming your control from the grips of debt is as easy as breaking negative thought processes and embracing solutions. Here are some of the most common debt myths that keep you from tackling debt and living life to its fullest.

All Debt Will Hurt Your Credit Score

One of the biggest debt myths is that all debt is created equal. Some debts, like mortgages, are classified as “good debt” because they come with lower interest rates, positive tax benefits, and more.

Other debts, such as those with high interest rates, are bad debts. Credit card debt is one of the most common forms of “bad debt,” as the average APR on a credit card is typically much higher than a personal loan, mortgage, or other types of debt.

Having debt won’t hurt your credit score. Instead, it’s how you manage that debt that causes harm. Since payment history accounts for 35% of your FICO Score, establishing a steady string of on-time payments can actually boost your score.

Additionally, recent FICO changes are limiting the negative impact of some debts, like medical debt. This reduction in importance, plus the emphasis on your ability to repay debt, is far more critical than the debt you hold in most cases.

You Can’t Enjoy Life Until You Are Debt Free

Being in debt isn’t fun. Because of the mental stress debt causes, many people believe they can’t enjoy their life until they repay everything they owe. The fact is, however, that repaying debt doesn’t have to eat up all your finances.

The thought that your enjoyment of life is over until you are 100% debt-free is another of the most prevalent debt myths. Many types of debt – notably student loans and credit cards – can be refinanced. Refinancing options for student loans include income-based repayment plans (IBR), income-driven repayment plans (IDR), and simple rate negotiations. Since many student loans are issued through the federal government, there are plenty of options to refinance student debt and make monthly budgets stretch further.

For credit cards, the options aren’t as numerous. Fortunately, there are still great ways to reduce the budget you must set aside for repayment each month. These refinance options include:

  • Balance transfer credit cards
  • Renegotiating interest rates with your lender
  • Hardship assistance programs

Balance Transfer Cards

A balance transfer is an excellent way to reduce costs and save money each month. When you conduct a balance transfer, you shift the balance of one credit card to another card, often at a much lower interest rate.

Many of the best balance transfer credit cards come with 0% intro APR for a year or more. These introductory periods allow you to pay off debt without incurring more interest on the balance.

Remember that once these introductory, interest-free periods end, the APR will likely be in the 13% range (or higher). Some unique balance transfer cards, like the Upgrade Card, counteract this by featuring rates as low as 6.99%. These cards, however, are the exception – and not the rule.

Renegotiating Interest Rates

Asking your bank for an interest rate reduction on your credit cards is something many people overlook. While requesting a rate reduction doesn’t guarantee success, it is a useful way to reduce the damage carrying a balance can cause on finances.

The keys to success when requesting an APR reduction are a solid history of repayments on the account, an established history with the bank, and politeness. Just make sure you prepare beforehand, state your case clearly, and be willing to negotiate.

Related Article: How to Negotiate a Lower Credit Card Interest Rate

Hardship Programs

Credit card companies offer payment relief services. These hardship programs have come to the fore during the coronavirus pandemic but are available for all credit cardholders. Some of the hardship assistance programs available to consumers include:

  • Deferred payments (either with or without interest)
  • Delayed payments for the next month
  • Waiving of fees (including late fees or annual fees)

Never be afraid to ask for assistance from your lender, including forbearance options. It’s in the best interest of all lenders to work with you to help you make payments. After all, if a credit card account goes to collections, the bank stands to lose out on a lot of money.

Related Article: Does Credit Card Forbearance Hurt Your Credit Score?

You Need to Pay Off All Your Debt as Fast as Possible

Eliminating your debt is ideal, but don’t let it get in the way of living your life. Focus on paying off bad debts first through the methods mentioned above.

Other types of debt, such as student loans or mortgages, have much lower interest rates and better tax benefits. Because of these benefits, you can afford to pay them off more gradually, and use the remaining budget to save towards your retirement – or even for treating yourself once in a while.


Paying off debt may seem difficult, but don’t let it destroy your quality of life. Many individuals suffer from debt, but it doesn’t mean you should let it ruin your enjoyment of the now. Simply switching your mindset and avoiding common debt myths can lead to greater joy in life – and less worry about the burdens of personal debt.

There are plenty of ways to repay debt that won’t force you to suffer financially and mentally. Take the time to research your debt repayment options, consider simple refinancing options (like balance transfers, assistance programs, or consolidation loans), and reclaim your life!

Related Article: Will Paying Off Credit Cards Hurt Your Credit Score?

About: Cory
Cory Santos

Cory is's "Jack of all trades" and resident credit expert, covering all facets of the credit card space. Cory holds academic degrees in both the U.S. and U.K. In addition to credit cards, Cory finds that jogging, cats, and memes are essential parts of a balanced day.

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