Today I am lifting from a blog post by Terri Steingrebe, CEO of the excellent nonprofit More Than Wheels. More than Wheels helps people get their finances in order and learn practices that enable them to get a car loan that doesn’t gouge them. The organization started in New Hampshire, where having a car is essential for a job. (There is no public transportation to speak of.)
“Why is it that there can be such deep shame over credit issues?” writes Steingrebe. “We’ve all felt it: That moment when your credit card is declined – even if you know it’s up to date. Even those few seconds while you wait for a charge to go through can be peppered with anxiety. It’s as if you suddenly feel like the one slacker in a room full of bill-paying rock stars. For people whose credit has fallen on hard times, these types of feelings are an everyday reality.
“Of course, it turns out that you are far from alone, even if you legitimately have a credit stumble. Over a third of all Americans fail to pay every bill on time, according to CreditCard.com. Time Magazine reported that three-quarters of young adult renters (ages 18 to 24) spend more than they earn – every month. Easily accessed credit and declining financial literacy make it likely that these trends will continue to worsen.
“So why the stigma? We live in a society that encourages us to overspend and take on credit that we can’t afford, but then shames us heavily when we miss a payment. Scan lists of the things people worry about the most, and ‘paying the bills’ consistently comes out on top.
“I believe there are two important factors that account for deep credit shame. The first is that people are fundamentally wired to be responsible. We care about keeping out commitments, especially those to our creditors. Against that, though, comes the second factor. Bill collecting practices notoriously play off our natural sense of responsibility and use shame as a powerful tool to try to get people to pay.” Read her whole post here.