Does This Debt Make Me Look Guilty?
Debt is the little black dress in everybody’s wardrobe. You may not want it, it doesn’t really excite you, but you’re encouraged to have one because you never know when you might need it. Debt usually starts off being called credit, and credit is supposed to be a good thing to have. A British friend of mine recalls arriving in the United States, some years ago, without a credit record. His finances were in scrupulous order, he didn’t owe anybody a dime, he paid his bills on time, and he had a well-paying job. The trouble began when he tried to engage in any substantial financial transactions – without a credit record in the United States, you simply don’t exist. He ended up having to buy things he didn’t want, on credit cards he had no desire to own, all in the name of “building up a credit history.” As he put it wryly, “I had to borrow money I didn’t need in order to prove they could lend me money I might need.”
Today, vast numbers of people in the U.S. are in debt, and I happen to be one of them. Sometime in 2008, I got sick and tired of paying the credit card company money I didn’t have. Eventually, I was taken to debtor’s court and, at this point in time, the creditors and I face each other with somewhat different agendas in mind. They’d like to collect what they’re owed, and I’d like to make more money. My experience in debtor’s court, which I’ll write more about in the coming months, revealed that while there may be no official debtor’s prison, people who incur debt in the United States are in fact caught in a system that is, for all intents and purposes, not all that different from the nightmarish conditions described in Charles Dickens’s novel Little Dorritt. When I made the comparison, a friend reminded me that there were no shackles and chains involved these days. She’s right, of course, although even that might be changing, if recent stories about debtors being put in prisons are any indication.
But for now, what I really want to focus on is the issue of guilt and related emotions that are attached to debt. On the face of it, it might make sense to feel guilty about debt. Or does it, really? The logic around debt goes something like this: Debt is something you incur, it’s something you should not have incurred, and something you ought to pay off as soon as you can. But some of us might not feel quite so sure about all that – my friend K. literally thumbs her nose at the creditors and says, “They shouldn’t have lent me the money, given what they knew about my finances.” That kind of rationale was, as we know, popular in the wake of the subprime mortgage crisis. For a while, it looked like there was actually going to be a widespread and sustained critique of the system that had taken so many people to the brink of bankruptcy and beyond. And it seemed like we might start looking at other parts of the financial system with the same critical eye. But that critiqe is being replaced by a culture of blame that now seeks to find new ways for you to feel guilty about your debt. Take, for instance, the recent news that banks, frustrated by the soon-to-be-mandated limits on the hitherto exorbitant fees on people who fall behind on payments, might now consider going after “good” clients by “reviving annual fees and eliminating or reducing grace periods for paying off card debt.”
The result is a pitting of “good” versus “bad” credit card holders, and the comments on a recent NYT piece about the proposed changes are filled with the ire of huffy consumers like “jenn,” who writes: “Surprise! Once again the thrifty among us will pay for the profligate.” In other words, the “profligate” among us should feel guilty for making those nice thrifty people pay for our nasty spending habits.
To be fair, I don’t think that most people really believe that this tactic is anything more than the desperate rumblings of the credit card industry (and, to be cynical, I also think it’s worth examining the fine print in the changes to the law before we get too enthusiastic about them). But that kind of simple division between good and bad, thrifty and profligate is an indication of the extent to which ours is a culture of affect, and the extent to which emotions like guilt pervade even our financial lives.
Because, when you look at it, why feel guilty about your spending habits or your debt? Isn’t it bad enough that a lot of us feel desperate and overwhelmed by debt? Isn’t it unfair that many of us spiral into debt because of medical emergencies that land us in bankruptcy? Instead, we’re distracted from the conditions that create debt and made to believe that debt somehow accrues as a result of some moral failing, for which we should eventually repent. Sure, every now and then Dr. Phil or Oprah might find a family that’s tens of thousands of dollars in debt because the mother has an obsession with shoes and lets her family starve while she sashays around the mall looking for new clothes. And the shows inevitably feature Suze Orman who will, fingers literally wagging, scream at the mother and tell her how selfish and stupid she’s being.
But, really, even putting aside the question of whether or not these families really got there because of pure greed and irresponsibility, are such people really the norm? Can we, in the case of the average debtor, really find such easy ways to connect debt to something so emotional as the desire to be meaningless consumers, or the inability to see that our families are starving? Orman loves scolding people for their “bad” spending habits, but she never critiques the larger system that sets people up to fall into pits of debt in the first place. And she doesn’t tell audiences that she’s a paid spokesperson for the developers of FICO, the credit score formula that she claims provides the most important financial score they should track. After all, revelations like that, if made up front, might undermine her image as someone who’s just trying to help people, and instead reveal that she’s created a business conglomeration out of making people feel bad about their debt. Orman and others turn debt counseling (and even putting those words together is symptomatic of the state of things) into psychobabble, encouraging us only to focus on our emotions. The NBC financial guru Jean Chatzky even wrote a book titled The Ten Commandments of Financial Happiness, turning our finances into an emotional drama that now came with a Biblical admonition to be happy, damn it.
Instead of feeling guilty and emotional about our debt, perhaps it’s time to consider that debt is a financial condition, not an emotional one. Instead of feeling guilty about our debt, we ought to simply demand solutions to a crisis that was created by a system that reaps the benefits of attaching emotions to money.
Wow, Yasmin! Great post! I think you make a really great point about the stereotypes we have in this country about people who carry debt. And I think there’s an eve further distinction people make about “good debt” and “bad debt.” Godd debt is a mortgage or a student loan. Bad debt is credit cards. However, even mortages have been revealed as “bad debt,” since many people qualified for loans that they never should have gotten. Our whole system is ridiculous, as you point out. And yet this culture absolutely makes you feel bad about yourself, even though you’ve fallen into a trap that was created by the conumserist culture in the first place. It’s a no win.
Serena,
Thanks for pointing out the further differences between good and bad debt – you’re right about mortgages and students being separated from credit cards. Of course, it would make sense to have a system where somebody didn’t have to go into debt for something as vital as education but, of course, that’s just socialist talk!
Thanks for pointing out the system’s hypocrisy, Yasmina. Surely a lender is as responsible for their ‘investment choices’ as the borrower is for their debt. I think there are definitely people who simply feel entitled to instant gratification without thinking they have responsibility, but they are somewhat like addicts who face emotional barriers to controlling themselves. Debt counselling and Debtors Anonymous can assist you in tackling those emotional barriers. However, there’s also the basic reality that the economic system is stacked against some people. The cost of education has been privatized. The cost of retirement has been privatized. The poorest members of society grow up in debt and will die in debt, and yet they are still given credit because it’s profitable to collect their fees for the loan.
Yasmin,
What a thoughtful, insightful post! The demonizing of debtors needs to end. The real devil is the flattening of real wages and job opportunities. Thanks for your astute analysis.
Regan and Jennifer,
Thanks for the words! Regan, I agree with you about the cost of privatisation and the frightening prospect/fact that a lot of people are going to be growing up in and dying of debt.
I’m curious to know if anyone here has seen the film Maxed Out? It’s somewhat depressing, but an excellent indictment of the credit card industry. Your comments reminded me of several of the points made there.
Wow, I guess I’m going to be in the minority HERE. I’m surprised there are no other dissenting voices.
Don’t buy what you can’t pay for — that’s a simple rule that would keep MOST people out of debt. I know that some people get into debt due to true emergencies like medical crises or job loss, and I’m not referring to them. I’m referring to the much larger group of Americans who let themselves be seduced, or think that debt is just “what everybody has,” and get in over their heads one impulse-purchase at a time, until they’re really stuck with unmanageable debt.
We DO live in a consumerist culture, and lenders ARE aggressive and lay traps for the unwary, or even lie. People enter into business contracts (mortgages, credit-card deals, installment loans, etc.) casually, without reading the fine print. This lack of basic financial prudence is all too common, for some reason.
Everybody is responsible TO THEMSELVES for gathering necessary information to inform their decision-making. Once we’re grown up, we get grown-up and binding consequences, unfortunately. This is the hard truth, and people DO pay the legal and financial prices for their actions or failure to investigate (losing your license for a DUI, having creditors on your tail, getting the bad end of a contract, etc.) My own rule is: “THE SMALLER THE PRINT, THE MORE IMPORTANT THE INFORMATION!”
Far be it from me to defend greedy and aggressive lenders!! But buying into a “spend more than you earn” lifestyle because credit is easy to get is a personal financial error; nobody has a gun in your ribs, even if they ARE dangling a carrot in front of your nose. “Let the buyer beware” is an ancient maxim that is fully relevant today.
I use credit cards and have a mortgage, but debt scares the crap out of me and so I don’t let it build up; it’s so easy to accrue and so hard to repay! I found this out from personal experience; for good reason, I chose to live for a summer off my VISA, then got a good job in the Fall — it took me almost a year to pay off a $3,000 debt, and I decided never to do it again. I’ve made a few other financial mistakes too, and I OFTEN wish I had “do-overs” for money I spent, that timeshare I shouldn’t have bought ($$$!), etc. But no do-overs are available; I can only try to make better decisions in my life TODAY.
I thought this article was largely a cop-out. You know, when we blame “Them,” we’re creating a scenario where the problem is OUTSIDE ourselves, which means we have little power to create change. If we look INWARD and take full responsibility for our own parts, we are in an EXCELLENT position to create change in our own lives. This is the first step in finding solutions and clearing away the wreckage of our pasts.
Andy,
You’re responding to a phantom article, written by somebody else, somewhere else. This article is hardly about justifying credit card debt, or blaming the system for dangling credit cards in front of us. Your post misses the fact that there are all kinds of debt which have nothing to do with credit cards. And, more importantly, you completely miss – or wilfully ignore – the point that I’m critiquing the system whereby repayment is extracted and the psychological manipulation of guilt over “good” and “bad” debt… and…and…and.. a host of other issues which you don’t even seem to have read in your haste to write the usual “you have no one to blame but yourself to blame for your debt” rationale. Of course, there’s some truth to the notion that people do sometimes behave irrationally, but my article was less concerned about that and more about the culture of guilt we’re steeped in. You also appeared to have missed my point about how credit is deemed necessary, and eventually turns into guilt.
I’d advise you to read the post again, especially the lines that sum up what I wrote about at the end: “Instead of feeling guilty and emotional about our debt, perhaps it’s time to consider that debt is a financial condition, not an emotional one.”
I won’t delve too deep into the rest of your response since it appears to be a tirade launched against someone else’s post altogether, somewhere else. To sum up: this article is clearly not a “how not to get into debt” or a “I hate the people who got me into debt” piece, but an analysis of the system of guilt that entraps us.
Hi, Yasmin. I thought your response was lacking in respect. I’m sorry if you took offense at my honest belief that your article failed to grasp the empowerment inherent in taking personal responsibility for ALL our actions, empowerment that is itself an ANTIDOTE to guilt.
However, I think it was gratuitously personal to suggest repeatedly that I was addressing a “phantom article,” that I was “launching a tirade,” that I was “in too much of a hurry to write the usual [blame] rationale,” or that I “wilfully ignored” your points. My post does not merit this off-handed dismissal; it deserves the respect I gave your post by writing a thoughtful comment based on my own experience, even though I disagreed with a fundamental part of your premise. If you are writing articles for wide dissemination, such as this one, you should expect that people will sometimes disagree, and respond (if at all) without attacking. I was the only commenter who even slightly disagreed with you, but my post was entirely civil. The strongest thing I said is that I thought the article was “largely a cop-out.” By this, I only meant that I thought the “culture of blame” model was mistaken in putting responsibility outside oneself, which I think actually ENABLES guilt. You try to cast me with “Them,” the blamers, but I reject your label. In my post I made it very clear that I have made financial mistakes of my own and am still learning; I’m not on a high horse.
That said, I DID read your article and the comments carefully the first time and I just now read them all, carefully, again.
I stand by my post. You accuse me of blaming people for their debt, but I don’t blame — I merely acknowledge that “my debt IS my debt.” No moral value: debt is a choice I made, and like all my choices, it has consequences which I will need to address. This is the first step toward a solution, WHEREVER I’M STARTING FROM. I also acknowledge that when I borrow money, the obligation to repay it is expressed or certainly implied. Thus I found your phrase, “I’m critiquing the system whereby repayment is extracted” surprising. Does anybody think repayment ISN’T part of the system?
Nowhere did I suggest that people SHOULD FEEL GUILTY about debt. There’s not much point in that. I merely stated the plain fact that people ARE legally liable for the debt they incur and that “the culture” won’t protect people — people must protect themselves. I think taking on guilt over debt is not worthwhile, and taking constructive action is an ANTIDOTE to guilt. The most constructive action we can take is to be honest with ourselves about OUR PART in our troubles, and be willing to make changes where they’re needed, to minimize further negative consequences.
I think that envisioning “a psychological manipulation of guilt,” a “culture of blame,” “the culture of guilt we’re steeped in” and “the system of guilt that entraps us” is terribly disempowering. It puts all the power “out there” somewhere, instead of empowering the individual. Okay, I understand the idea that people who have creditors may feel guilty, but I don’t see that this guilt is forced upon them; your own conclusion implies that guilt is a choice and that we can reframe debt to omit the guilt.
Instead of a blaming culture, to me our culture seems to say, “Hey, live it up! Don’t worry! No consequences!” As for “good debt” and “bad debt,” I think the adjectives are meant to characterize whether the debts are troublesome or helpful to basic personal finance, not whether the people incurring the debt are “good” or “bad” people. Personalizing the terms as a moral critique is not mandated.
As noted above, regarding your last line, “Instead of feeling guilty and emotional about our debt, perhaps it’s time to consider that debt is a financial condition, not an emotional one,†I FULLY AGREE. I never took issue with this in my post. I did understand that your article was about guilt, your assertions to the contrary notwithstanding. I believe there’s room for honest intellectual exploration of the subject of guilt and debt, and I made my contribution. The fact that it didn’t entirely square with yours does not represent a PROBLEM; it’s called “the exchange of ideas.”
If you decide to respond to this comment, I hope you will do so without again questioning my good-faith engagement in your topic. It’s extremely relevant and it interests me; I wouldn’t have spent upward of an hour on each post if it didn’t.
Respectfully yours,
ANDY
Andy,
The problem is that you completely misconstrued the basic premise of my article. And you continue to do so. For instance, when you write: “Thus I found your phrase, “I’m critiquing the system whereby repayment is extracted†surprising. Does anybody think repayment ISN’T part of the system?” – you miss the point entirely – I’m writing about and critical of – and here I repeat myself – the SYSTEM whereby repayment is extracted. Which is to say, the system that overvalues an emotional investment in money. The exact kind of emotional investment that compels us to buy too much in the first place: Buy an expensive car because it’ll make you happy to have all these accessories you’ll never need. I don’t see how you construe my critique of the inducement of guilt as an endorsement of the idea that we should not pay off our debts.
That kind of misperception of what my article is about influences your first and second response. There are probably articles out there that insist that no one is to blame for their debt, and there are probably articles out there that insist that everybody is to blame for their guilt. Your response is aimed at the former. I, obviously, am one of those who is somewhat critical of how the credit card manipulate people into debt. But that’s not the thrust of my article. The thrust of it is to say: look, we may owe money, rightly or wrongly, because we got into this mess ourselves or were led into it. Sure, we have debts to repay. But the way in which our debts are construed as “good” (house/school) or “bad” (shoes/clothes) is wrong. And the current finger-wagging by people like debt collectors or the likes of Orman, who want to shame us into spending our lives doing nothing more than paying off exploitative credit card companies – as opposed to saying, “Hey, who asked you to raise my rate to 28% for being a day late?” – is wrong. You write that I “failed to grasp the empowerment inherent in taking personal responsibility for ALL our actions, empowerment that is itself an ANTIDOTE to guilt.” Um, yeah, except that was not the point of my piece. I don’t write an advice column about debt. Frankly, the more I read your responses, the more they read like something the likes of Orman would write. It’s exactly that kind of psychobabble disguised as “empowerment” that I criticise.
I don’t know how much clearer I can be. In sum, again, if I’d written an article stating that debt was nobody’s fault but that of credit card companies, your response would make sense. But I didn’t, it doesn’t, and I can’t spend any more time explaining that to you.
As for engaging with people with people who disagree, ah, trust me, I practically do that for a living. But I’m not going to spend time engaging with someone who completely misses the point of the article. In such cases, I find it best to be pointed and move on. That’s not being disrespectful – the fact that I point out that you’re responding to a phantom article is stating the facts as simply as I can. But, clearly, that has not helped since you persist in addressing someone else’s points and an article I did not write.