You’re either blowing it on luxury or paying down debt. Either way, you should be worried.

I love reading TMZ and Page Six for the latest celebrity gossip (except when they write something that’s not true about me!). But I also read a lot of dense and dry financial data, because I care more about financial literacy than A-list celebrities.

Recently, I saw something disturbing, but not for the reasons you might think.

It was a “Credit Outlook Analysis” from the third quarter of this year. A lot of its conclusions are obvious to most of us: “Prices remain high or continue to climb, and many Americans continue to struggle.”

Here was the troubling part:

Thirty percent of consumers who took out loans during the past six months used them for emergencies or to pay bills, and one out of four people used recent loans to pay towards credit card debt. …  Fewer people are interested in securing new loans due to higher interest rates, and those who are taking out loans are more frequently using them simply to stay on top of bills.

Here’s what that means in plain English: Inflation is kicking our butts, so the Federal Reserve has repeatedly raised interest rates to slow it down. But that means we’re paying more to borrow money – everything from our credit cards to new mortgages and car loans. So, most people aren’t taking out new loans, but those who are feel forced to do it because they can’t pay all their bills.

Why this is scary

In my experience as an insurance agent and financial counselor, most people take out loans for two reasons – both bad. But one is worse than the other.

Of course, the best reason to borrow money is when it can make you money. For instance, a reasonable mortgage on an affordable home is considered “good debt.” Most homes appreciate in value, and even if yours doesn’t, you can sell later.

Likewise, if you take out a debt consolidation loan that charges less interest than you’re paying now, that’s a smart move, too. Unfortunately, those aren’t the most common reasons people take out loans. These are…

The first reason was popular before the Great Recession and actually helped deepen its awful effects: Homeowners were taking equity out of their home and buying boats, vacations, and other amazing but unnecessary items. Instead of saving for retirement, they were living it up now. Of course, they paid for it later.

The second reason a lot of people take out loans is exactly what this Credit Outlook Analysis is talking about: Taking out a loan to make ends meet.

This is different than a debt consolidation loan. It’s akin to a payday loan, which is a dangerous way to pay bills. Basically, your salary can’t cover your expenses, so you take out a small loan to bridge the gap. The problem is you now have another interest rate to pay – which means you have even less money to pay next month’s bills.

What to do about it

If this describes you, a loan isn’t the way to go. First, you’ll need to qualify for a loan. These days, lenders hesitate to lend money. If they give you a loan, they’re charging you a steep interest rate. And as I just mentioned, that’s not solving your problem. It’s just delaying an inevitable crash of your finances.

What really depressed me about this Credit Outlook Analysis was how easy it is to fix the problem. Instead of trying to juggle loans to make ends meet, you can meet with a counselor who can end your debt.

When you call, you receive a free debt analysis from a trained credit counselor. That counselor will lay out all your options. Those include similar-sounding programs with names like debt management and debt settlement. You’re not obligated to do anything, and you can even think about it and call back later. But whatever you do, if you’re taking out a loan to pay bills or even thinking about it, do nothing else until you call an expert. Don’t borrow money until you lend them your ears.

Call at (844) 844-2543 for a free debt analysis from a certified credit counselor and for more information, check out:

Was this post helpful?
Let us know if you liked the post. That’s the only way we can improve.

About the Author

Vicki Gunvalson

Vicki Gunvalson

Before Vicki Gunvalson starred on Bravo TV’s hit series “Real Housewives of Orange County” – which launched the franchise in 2006 – she was already a financial expert. Gunvalson has owned and operated Coto Insurance for three decades. Based in Irvine, California, Coto has been ranked among the top 1 percent of insurance companies nationwide, with more than 10,000 clients in those 30 years. Coto’s success helped Gunvalson become a member of the Million Dollar Round Table – which represents the top life insurance and financial services professionals from more than 70 countries. She continued to grow Coto during 16 salacious years on the hit show and subsequent celebrity projects. But it wasn’t just Coto that has earned Gunvalson praise and awards for her financial acumen. Licensed in every state not just as an insurance agent but also a retirement specialist, she has made it her mission to help people – especially women – become financially independent. She has partnered with to help even more of them. “I’ve counseled thousands of Americans who experienced their own melodrama – over money,” Gunvalson says. “ is in some ways exactly like me – and in other ways, unlike me. We both care deeply about getting good people in better financial shape. But unlike me, they do it quietly!”

Published by, LLC