Can credit card debt make you sick?

By Marianne Curphey


Too much credit card debt can damage your credit score, lowering your chances of securing future loans, rental properties or even a job. But your credit card debt could be damaging your health just as much as it's damaging your credit rating, leaving you physically and mentally unwell.

The latest Financial Wellness Index from Momentum UK revealed that people with little savings and those struggling to pay their bills are most likely to suffer from ill health. People in good health, on the other hand, are more likely to enjoy a higher level of financial wellness.  

"The link between financial and physical health is strong in this year's index, which is not wholly surprising when you start to analyse the similarities in behaviour needed to achieve both," Samantha Seaton, managing director of Momentum UK (Retail), said in a press statement.

Money and health experts we spoke with also say there's a clear link between financial wellness and physical and mental health.

Health and wealth go hand in hand
Momentum found the link between finances and health to be a consistent theme in its report. 

The research found that the 17 per cent of people interviewed who classed their own health as "poor" had missed a bill payment in the last 12 months - more than three times the proportion who rated themselves as being in excellent health.

There was also a correlation between physical well-being, diet and savings. For example, those in poor health are twice as likely as those in excellent health to have no money saved for a rainy day, and to have a poor diet. And people who feel they don't eat enough healthy foods are twice as likely to have been unable to pay a bill on last notice than those who feel they do eat healthy.

"There is a direct connection between financial worries and suffering the physical and mental effects," says Heidi Allan, head of insights and engagement at Neyber, which offers employees low cost loans repaid by salary deduction and free financial education in their workplace.

Debt and mental health
It's not just physical health that's affected when you're carrying debt. Worrying over debt can be a significant catalyst for illness and depression, says Chris Fitch, research fellow at the Personal Finance Research Centre at Bristol University and consultant to the Money Advice Trust.

"It does not matter how much you are in debt," Fitch says. "It is about the worry and the uncertainty that goes with it."

Those who help people with debt have no doubt about the effects it can have on an individual.

"I have lost count of the number of times I have had people with debt problems in tears in my office," says Mike Smith, director of Company Debt, which offers confidential insolvency help and free business debt advice. "They are usually very stressed and you can hear the desperation in their voice."

People in debt often feel that they have let others down, such as their family, and they may keep it to themselves for that reason, Smith says.

"The pressure builds up, they don't feel they can talk about it to other people, and it ends up with them waking up in a cold sweat at 3 a.m.," he says. "It can be resolved, though, and the sooner people come for help, the better."

If you are struggling to manage your finances, then you are probably not able to save, either. This can be a worry in itself if you have no fund for emergencies.

"Having a savings buffer makes a big difference to how secure you feel," says Allan. "It is money you have set aside for events like sickness, accidents, stress or long-term illness."

Finding a solution
Debt problems can be sorted out and payments renegotiated so that you need not feel that you are in a hopeless situation. There is always a solution.

"Find someone you trust and have a conversation with them," says Allan. "If you know your debts are mounting up, then use the advice and help of an independent charity for help and support."

Jonathan Watts-Lay, managing director of Wealth at Work, which runs employee education workshops, says many employers have schemes that can help with money management, but staff aren't always aware of them.

"For example, discount vouchers from retailers, giving you 5% off your shopping, or savings vehicles offering preferential rates not available on the high street."

Other potential perks include pensions with matched employer contributions and preferential, lower rates on loans, enabling people to consolidate their debt.

Sometimes, it's not just the debt itself that contributes to depression, but the debtor's interaction with creditors - or their fear of contacting creditors.

However, there's often less reason to fear than you think. Under the Lending Code (a voluntary code of standards for financial institutions in the UK), lenders have a duty to act "sympathetically and positively" when dealing with those who owe money.

The code also stipulates that creditors and lenders should encourage customers to get in touch if they are struggling to pay and should offer customers "appropriate and timely options" to "reduce the risk of deterioration in the customer's financial well-being."

Take action sooner rather than later
Depressing debt and physical malaise can make it tempting to stick your head in the sand. However, that course of action is unhealthy.

The potential health implications of trying to cope with debt on your own, especially if you have a pre-existing medical condition, make it even more important that you tackle the problem as early as possible.

"Prevention is better than a cure," Watts-Lay says. "It's definitely a good idea to resolve debt as quickly as possible - don't wait until the issue is massive."

You can seek free help from a charity that offers debt counselling. A debt charity can give free, impartial and independent advice on how to deal with your debts - and will be able to deal with your creditors on your behalf, which takes much of the stress of the situation.

If you are worried about money or any other issue that is making you depressed, you can also call the Samaritans on 116 123 (UK).

See related: Rebuild your score with a credit-building card, 'Clear Your Clutter Day' creator says decluttering can improve your finances, well being, How to turn a 'credit detox' into long-term healthy habits

Updated: 6 June 2017