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Why Debt is an Addiction: How to Recognize and Overcome It

Debt can be defined as a situation when you owe money to individuals, creditors, or organizations such as banks. Addiction is “the state of being enslaved to a habit or to practice something that is psychologically or physically habit-forming.”

Addiction comes in many forms, from drugs and alcohol to gambling and sex. But one addiction that is often overlooked is “debt”. Like all other addictions, debt can be incredibly destructive, leading to financial ruin and heartbreak. 8 in 10 Americans have some sort of consumer debt e.g. student loans, credit card debt, etc.

Let’s talk about what debt addiction is, how it differs from other addictions and the possible reasons behind it. We will also provide tips on how you can get started on your road to recovery!

So, if you’re struggling with a tendency to debt, please read on.

What is Debt Addiction?

It’s a real thing and more common than you might think.

Debt Addiction is a term used to describe someone addicted to borrowing money. This person may take out loans, use credit cards, or borrow money from friends and family to support their habits.

Simply put, it’s the compulsion to keep incurring debt, even when you can’t afford to repay it. This can ruin your finances and your life. It can ruin your credit score and make it impossible to get out of debt.

Why is Debt an Addiction?

When you’re addicted to something, you feel like you need it to function normally. This can easily lead to out-of-control spending as you search for that next high your addiction tells you you need.

There are a few different ways to look at it. One way is to consider the psychological effects of debt. Another way is to look at the practical reasons why debt can be addictive.

  • For many people, debt can be a way to avoid dealing with financial and personal problems in their life. It can be a way to escape from reality and numb difficult emotions. This can lead to a cycle of borrowing and spending that becomes increasingly difficult to break free from.
  • Practical reasons why debt can become addictive include the fact that it often leads to additional fees and interest charges. This can make it hard to keep up with payments and make it more difficult to get out of debt.

Debt Addiction Vs Other Addictions?

Debt addiction is the state of being enslaved to borrow money. This might mean using credit cards to make ends meet, living beyond your means, and/or being constantly in debt.

It’s not just about the money either. Addiction to debt can also involve the feelings of shame, isolation, and anxiety that come with being in over your head due to money problems.

Other addictions like drug or alcohol addiction fall into the substance abuse category, which can be both physical and psychological, whereas debt addiction is only psychological. For instance, you may borrow money if you don’t consume drugs or alcohol to pay bills in a financial crisis.

But new debt is incurred when you borrow more cash to clear your previous debts or get your desired lifestyle. This, in turn, causes more financial problems such as mortgages or bankruptcy.

Unlike drug addiction, there is no specific treatment center listing for debt addiction. But there are similar solutions like support groups and behavioral therapies, which will be discussed later in this blog.

5 Possible Reasons Behind Debt Addiction

There are numerous reasons concerning what might make somebody fixated on debt. Some of those reasons are explained as follows:

1. Low Income and Unemployment

Compared to their living standard, people with low-income levels and unemployed individuals often find it difficult to pay their rents and utility bills. Their poor financial situation renders them unable to save money after fulfilling daily necessities.

A 2021 statistics show that 33% of an American’s monthly income is spent on housing alone.

These people usually don’t remain debt-free. Not that it’s wrong or something! But incurring debt in desperate situations is the first step toward getting addicted to debt.

2. Family History

A conceivable explanation behind debt addiction is individuals growing up in a family where funds were constantly tight.

This may have instilled a fear of being unable to make ends meet, leading them to hoard money and eventually accumulate large amounts of debt compulsively. This may ultimately result in further continuous repetition of debts to pay off preceding debts.

3. Compulsive Shopping:

One of the most common reasons behind debt addiction is compulsive shopping disorder. Some people simply have an uncontrollable urge to purchase certain products or goods.

They derive a strong sense of satisfaction from shopping. This often leads to overspending and debt as they seek that fleeting feeling of happiness.

And to hold that fleeting happiness, these people would keep repeating the cycle of debt.

4. Overuse of credit cards:

Credit Card Debt is one of the most common types of debt. It’s also one of the most dangerous because it’s so easy to spend more money than you have.

People often use several credit cards to fulfill various buying desires, and thus the addiction grabs the wheel. When you use credit cards too much, you can quickly get into a financial hole that will be very difficult to climb out of.

You again max out all your credit cards to get out of that hole. And the cycle continues! For instance, America has an average credit card debt of $5135 for each household.

5. Substance abuse:

Drug Addiction and Alcoholism are two of the strongest and most widely prevalent addictions around the globe. People addicted to these will often require money to fulfill their addictive tendencies.

This, in turn, will result in debts, and after completely spending the borrowed cash, these people will again incur debts for buying drugs or alcohol.

The Dangers of Not Overcoming Your Debt Addiction

Your debt addiction can be extremely dangerous if you don’t overcome it. Some of the significant dangers associated with debt addiction are:

  • Debt addiction can ruin your financial life.
  • It can ruin your credit score and put you at risk of defaulting on your loans.
  • Not to mention, the stress of being in debt can take a serious toll on your mental and physical health.
  • It can take over your life and ruin your relationships
  • You could end up losing your home, your job, and your family.

7 Ways to Overcome Debt Addiction

There are many ways to overcome debt addiction, but first, you must acknowledge that you have a problem. This can be difficult, but it’s crucial to admit that you’re in over your head.

Once you’ve admitted that you have a problem, it’s time to take action. You must devise a plan to get out of debt and stick to it. This might require making difficult changes to your lifestyle, but it will be worth it in the end.

1. Self Control:

Self-help is the best help! The truth is, no one can help you the way you can help yourself.

You see, our mind believes whatever we let it believe. It is easy to control your mind if you can make it believe that debt is a bad habit.

2. Personal Banking:

Keeping personal records of your earnings, spending, borrowing, and paying is a great way to control debt addiction. Nowadays, you can even use software to keep track of your money.

3. Clearing Credit Card Debts:

If you’re not careful and don’t check your credit card statements periodically, your credit card debt can quickly get out of control like wildfire. Once you’ve reached your credit limit, you must pay off these loans within a certain time.

You’ll surely face negative consequences if you don’t make the minimum payments within time. I mean, how hard could it be when you can get a free credit report from every bank annually?

4. Budgeting:

A good Budget plan can help overcome debt addiction. Here are two things to consider:

  • Create a budget and stick to it. This will help you stay on track with your finances and avoid debt.
  • Create a spending plan that allows you to live within your means and still progress on paying off your debts.

5. Credit Counseling:

Credit counseling from your creditors or external credit counselors can get you certain solutions or even privileges in some cases. Good credit counseling may even get you some of the following benefits:

  • Payment negotiation
  • Interest rate re-negotiation
  • Account balance consideration

Here, your only job is to consider the counseling benefits as a second chance to try not to incur further debts.

6. Support Groups:

Get support! If you feel like you can’t do it alone, get support from others. Recovery from debt addiction is possible, and support groups can be a big part of that process.

Support groups for debt addiction can be vital in helping people recover from their addiction. These groups provide a safe space for people to share their experiences and seek help from others who understand what they are going through.

7. Behavioral Therapy:

This therapy can help people change their behavior patterns and thoughts about money. It can also help them to develop healthy coping mechanisms for dealing with financial stressors.

If you or someone you know is struggling with debt, consider seeking a qualified therapist specializing in this type of treatment.

To sum it up

The cycle of debt is difficult to break, but it’s not impossible. With the right amount of effort and support, you can overcome your addiction to debt and get on the path to financial stability.

If you feel like you’re struggling with debt, remember you’re not alone! please reach out for help. Thanks for reading! If you have found this helpful, be sure to check out our other blog posts.


1. Why is being in debt a problem?

Being in debt is a problem because it can lead to late fees and added interest, making the debt more difficult to pay. It can also make it difficult to cope with unexpected expenses and cause emotional stress.

2. What is credit addiction?

It can be defined as a compulsive need to use credit, even when it’s not necessary. This can lead to financial problems and ruin your credit score.

3. Why is Debt Addiction a Difficult Cycle to Break?

Debt addiction can be a difficult cycle to break, as the person may feel that they need to borrow more money to keep up with their repayments.

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