People who carry debt also have more physical pain, new study shows

"All of those conditions under which you borrow this debt ... are stressful."


The stress of carrying around debt is correlated with not only a mental burden but a physical one, according to a new study from the University of Missouri.

Those who carry unsecured debt, such as credit card balances or medical bills, tend to have poorer physical health than those who don't carry unsecured debt, the study found. The study examined the unsecured debt and income of 8,000 Americans over time from age 28 to age 40, as well as their physical health at age 50.

Those with consistently high debt were 76% more likely to have pain that interfered with their daily life, such as joint pain and stiffness, compared to those without unsecured debt. Even those who paid down their unsecured debt over time were 50% more likely to have pain interference than those who had no unsecured debt at all.

To some degree this is an "accrued stress response," says study co-author Adrianne Frech, a medical sociologist and an associate professor at the University of Missouri. "It's very much established that stress can take a toll on the body," she says. "And that shows up in pain."

Some debt is more stressful than others

When you take out a mortgage or auto loan, there's an asset (your house or your car) that secures the loan. With unsecured debt, there's no such collateral. It is considered riskier for the lender and therefore typically has higher interest rates than secured debt.

"One of our arguments is that [unsecured debt] is a more stressful kind," Frech says. In some cases, "people that take on unsecured debt do so when in financial stress," she adds. "Usually it's something where you don't have the financial resources in a savings or checking account."

Someone who can't cover their utilities or car payment, for example, might take out a credit card advance or a payday loan.

People that take on unsecured debt do so when in financial stress.
Adrianne Frech
medical sociologist and associate professor at the University of Missouri

The inability to pay those initial bills in and of itself can be hard on your mental health. That tension can be compounded by the knowledge that you are accruing high-interest debt.

"All of those conditions under which you borrow this debt and how long it takes you to pay it off are stressful," Frech says.

'You can't tell [people] not to borrow money to meet their basic needs'

As part of the study, researchers looked at revolving debt, which is any debt that isn't a set amount that needs to be paid for a set period. Credit cards are a key example. Revolving debt is similar to unsecured debt in that there is no collateral tied to it.

Last year the amount dropped as people lucky enough to keep working used stimulus checks to pay down balances. But now it's trending upwards again.

This reflects the pervasiveness of financial instability, especially for those without a college degree, Frech reports. "Income for people without a college degree has been stagnant or falling since the 1980s," she says. From 1979 to 2019, the wages of those with a high school level education or less dropped 11.1%, according to a paper by the Congressional Research Service.

The survey categorized people as having either no to low levels of debt or low to high levels of debt. People who only had high school diplomas were more likely to have low to high levels of debt compared to their incomes, researchers found.

College graduates were more likely to have low or no debt relative to their income than high school graduates: 69% to 63%, respectively.

Those who are taking out unsecured loans, Frech hypothesizes, are doing so out of a lack of options. It's important that solutions acknowledge or reflect the initial financial stresses that lead people to borrow.

"If people aren't earning enough money to pay for housing and utilities, you can't tell them not to borrow money to meet their basic needs," she says. "Instead of saying people should cope with stress or manage their money better, I'd say increase the minimum wage or increase housing subsidies."

How to manage unsecured debt

If you already have unsecured debt, there are steps you can take to help you pay it off, says Mark La Spisa, a certified financial planner and president of Vermillion Financial.

  • Pick a method to pay down debt: Two notable options include the avalanche and snowball methods. Using the avalanche method means you pay your highest interest rate loans first, which will save you more money in the long run. Using the snowball method means you make minimum payments on all your debt but instead of paying the debt with the highest interest rate, you instead pay off the smallest debts first to get them out of the way before moving on to bigger ones.
  • Plan ahead for costly time periods. For example, if you are planning to do home renovations this holiday season, start cutting spending now. That lets you build savings and create room in your budget to accommodate those upcoming costs. "Most unsecured loans come from lack of proper planning or overspending," La Spisa says.
  • Put debt repayment on autopilot. If you can, "set it up as an automatic payment," he says. This will ensure you pay on time every month and keep you on track, which is especially important with high interest rate loans.

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