Why we all lie about credit card debt

American consumers are carrying around a lot of debt. That’s nothing new. Those debt levels tend to rise and fall depending on the economy. When things are going well and the job market is strong, consumers feel confident about their future financial prospects and make increasingly large purchases on credit.

At present, households in the United States carry an average of approximately $130,000 in debt, a bit over $15,000 of which is credit card debt.

That’s the debt we have. But what about the debt we claim to have?

According to a study from Nerdwallet, in 2013 lenders reported balance totals that were 155 percent higher than consumer-reported balances. In other words, when surveyed, American consumers claimed to have less than half the debt they actually had.

Do consumers not know how much they owe?

There’s evidence that the cause of the discrepancy isn’t confusion or even a lack of awareness. It’s embarrassment.

Over two-thirds of Americans feel that credit card debt carries a deeper stigma than any other kind of debt. It’s okay to have a mortgage or student loans or medical debt, but credit card debt isn’t the same. Credit card debt marks you as irresponsible. It suggests that you don’t have the income to match your lifestyle – that you make bad financial choices.

None of that is necessarily true, of course, but the feeling is legitimate. To that point, 35 percent of those included in the Nerdwallet survey stated that they felt their credit card was embarrassing and that they would be substantially more embarrassed to reveal their credit card debt than any other kind of debt.

That isn’t just paranoia. While only a quarter of Americans would admit to judging a friend or loved one for having credit card debt, nearly half stated that they would be less interested in starting a romantic relationship with someone who has any amount of credit card debt.

Debt may not mean what you think

The embarrassment surrounding credit card debt is connected to the perception of what that debt means. But does perception match reality? In many ways, no, it doesn’t.

The truth is that the cost of living has been steadily outpacing income for over a decade now. Healthcare costs only have increased by 51 percent in the last 12 years and personal income simply hasn’t increased enough to cover the difference.

That doesn’t make consumers blameless. Our rising debt levels suggest that consumers have neglected to adequately adjust to the increasing distance between expenses and income. When what you buy costs more, but your money doesn’t increase, you need to make changes to your spending.

Don’t be embarrassed – be empowered

If you’d hesitate to tell a loved one how much you owe in credit card debt, take that as a sign that it’s time to make a change. Hiding from your debt won’t help you. Confront that debt instead. Re-examine your budget. Make a concerted effort to reduce expenses. Speak to an expert. Review various repayment options.

Credit card debt is normal. And, as we’ve already discussed, there are some very legitimate reasons for having that debt. So don’t let your perceptions of debt keep you from reaching out. Don’t pretend that your problems are half of what they are.

Own your debt. Then get rid of it.