BY THE OPTIMIST DAILY EDITORIAL TEAM
Debt can stir up a lot of emotions, and pretty negative ones at that, like shame, anxiety, and even fear. But according to financial educator Rita-Soledad Fernández Paulino, founder of Wealth Para Todos, we need to strip away the stigma. “It’s just what we use when we don’t have access to cash reserves,” she explains. In other words, debt is simply a tool. Not a moral failing.
Unfortunately, lingering myths about debt often get in the way of building a healthier financial future. These myths can stop us from seeking support, seeing our situation clearly, or even learning how to use debt strategically.
Let’s unpack three of the most common misconceptions (and what to believe instead).
Myth 1: If you’re in credit card debt, you’re just bad with money
Many people assume debt comes from overspending or poor budgeting. But in reality, that’s not the full picture.
A 2025 Bankrate survey found that about 45 percent of people in credit card debt were driven there by emergencies or unexpected expenses. Things like car repairs, hospital bills, or surprise home fixes can push even the most financially responsible person into debt.
Fernández Paulino sees this in her work all the time. “The clients that come my way have usually dealt with the death of a loved one and are struggling with so much grief that they struggle to show up for work,” she says. Others are navigating serious health issues and accumulating debt while seeking treatment.
That’s why she encourages clients to create an emergency fund alongside their debt repayment plans. It’s not just about paying off what you owe, it’s also about protecting yourself from future setbacks.
Myth 2: You should avoid debt no matter what
Fear of debt can run deep. For some, it stems from watching family members face bankruptcy or foreclosure. Others may have grown up in households where money wasn’t openly discussed. These early experiences often lead people to think, “Debt is dangerous. I’m never going to use it.”
But avoiding debt altogether can sometimes backfire. “So when they start using a credit card, they don’t know how to use it,” says Fernández Paulino, who works with many first-generation Americans and immigrants who weren’t exposed to financial education early on.
John Kiernan, managing editor of WalletHub, agrees that having at least one credit card in good standing is crucial. “It sends positive information to the credit bureaus each month,” he explains. That can improve your credit score, which helps you access loans, better rates, and financial opportunities down the road.
Understanding how credit works can take the fear out of it. And once you see it as a tool rather than a trap, you can start using it to your advantage.
Myth 3: Getting out of debt is impossible
This one might feel true, especially when your minimum payments barely seem to make a dent. But Fernández Paulino insists that progress is possible. “What’s true is that without enough monthly surplus…progress is slow,” she says.
So, what’s the solution? Building up that surplus, or in other words, the extra money you have after paying for essentials and minimum debt payments. That might involve cutting expenses or increasing your income temporarily. But even small changes can add up fast.
“When clients build that surplus, they can make dents quickly,” she explains. Some have eliminated five-figure debts in six months. Others take longer—12 to 36 months—but the key is consistency.
Ultimately, your payoff timeline depends on three variables: how much you owe, your interest rates, and how much extra cash you can consistently put toward your debt.
The bottom line
Debt isn’t something to be ashamed of. It’s part of life for many people, especially during hard times. But by challenging harmful myths, learning how debt works, and making a plan that fits your situation, you can take control of your finances with confidence.
