Home > Managing Debt > Are We All Doomed to Be in Debt?

Comments 0 Comments
Advertiser Disclosure


You’d be hard-pressed to find someone who likes being in debt. Even when it helps someone accomplish a goal, like getting an education or buying a home, going into debt isn’t exactly fun. In fact, a lot of people say it’s downright terrible.

A new survey shows 54% of American adults at least somewhat or strongly agree with the idea that debt is “awful but unavoidable.” Prosper, an online lending marketplace, commissioned the survey of 1,000 American adults, asking them about their personal financial health. The results are based on interviews between Dec. 2 and Dec. 9, 2015, and the margin of error is plus or minus 3.1 percentage points.

Nearly two-thirds of Americans said debt is necessary to build a strong credit history, but 64% said debt is a trap that should be avoided at all costs. In short, most people think debt is a necessary evil.

But debt isn’t necessarily evil. You can improve your credit without going into debt (basically, use a credit card and always pay the balance in full), and in many situations, loans can be a worthwhile investment. Borrowing money to pay for college, buy a home, or start a business can have immense value, even if that means you’re in the red for a while.

Of course, investments sometimes go wrong. Taking on debt or opening a credit card always has risks, and Americans are quite familiar with them. For that reason, you should always think carefully about why you’re borrowing money and what you’d do if you ever had trouble making payments. Just as debt can help you build credit, it can destroy it if you start missing payments or let your credit card balances get close to their limits. (You can see how your credit fares by looking at two of your credit scores for free every month on Credit.com.)

To protect yourself against debt and credit troubles, do your best to plan for emergencies. Unexpected expenses often cause debt problems, which is why having an emergency fund is so important, but the Prosper survey says more than half of Americans have less than $5,000 saved, including a third who have less than $1,000 saved.

With those figures in hand, it’s easy to see why people think debt is awful and unavoidable. Sometimes it is. But it doesn’t have to be.

More on Managing Debt:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team