Most people have some debt, which is often necessary for housing, transportation, and daily living. However, when debt becomes unmanageable and exceeds your ability to pay it back, it can lead to serious financial and health-related issues.

Financial Consequences
Excessive debt can severely impact your financial life. A high debt-to-income ratio makes you less
attractive to lenders and can lower your credit score. Credit utilization, the percentage of available
credit you’re using, is a major factor in your score; keeping it below 30% is recommended. If your
credit score drops, you’ll pay more for mortgages, car loans, and insurance. Over time, this can
mean paying tens of thousands more in interest.

A high debt-to-income ratio also reduces your borrowing power, making it harder to get approved for new loans, especially at competitive rates. Another consequence is the inability to save for future expenses or retirement. If your debt exceeds your ability to pay comfortably each month, you may end up using credit cards for everyday expenses, creating a cycle of “robbing Peter to pay Paul.” When credit lines are maxed out, your options become very limited.

Health Consequences
Financial stress affects nearly every aspect of life. Constant worry about money, housing,
transportation, and feeding your family can lead to stress-related health conditions, some of which
may be serious or even life-threatening if untreated. Anxiety and depression are two common effects of financial stress, often occurring together. These conditions can make it difficult to focus at work, spend time with family, and manage bills and responsibilities. The burden of credit card debt, student loans, or medical bills can cause severe anxiety and depression. Signs include discouragement, hopelessness, constant worry, and poor concentration. If you experience these symptoms, it’s wise to consult a doctor.

What to Do
If you’re overwhelmed by debt or see it becoming a problem, address it quickly. Update your
household budget, look for ways to reduce expenses, and remember that your health is your most
important asset. For professional help, contact a certified debt specialist at (888) 254-4925 or make an appointment with a counselor at Cambridge Credit Counseling.