Killer debt: Is your credit card making you sick?
By Libby Wells • Bankrate.com

"The surest way to ruin a man who doesn't know how to handle money is to give him some."
-- George Bernard Shaw, Heartbreak House

Never mind what a stack of overdue bills can do to your credit rating. The more important consideration might be: How does being financially overextended affect your health?

A study by Ohio State University suggests that people who are stressed about debt, particularly from credit cards, tend to be in worse physical condition than folks without money worries.

Researchers found that the price of financial anxiety ranges from heart attacks, insomnia and explosive emotions to difficulty doing such simple tasks as climbing stairs and carrying groceries.

And the people ailing the most are those with big chunks of their income tied up in credit card bills.

"Debt-to-income ratio is significantly associated with higher levels of impairment," the study notes.

Debt stress and health linked
The link between debt stress and health was discovered by Paul J. Lavrakas, director of OSU's Center for Survey Research, and former colleague Patricia Drentea, who is now assistant professor of sociology at the University of Alabama-Birmingham.

The results of their study -- a 1997 random telephone survey of more than 1,000 Ohioans -- were published in the February 2000 issue of Social Science & Medicine.

While it's well-known that stress is detrimental, OSU's research is the first to show a connection between health and the strain of credit card debt.

"For the individual consumer this is not a new message," acknowledges Lavrakas. "But what's striking is the risk you could be taking down the road with how you manage your debt.

The pair focused on credit card debt because it's often an indicator of hardship. Families having a tough time making ends meet frequently turn to plastic to pay for basic necessities such as food, medicine, clothes and even the rent or mortgage.

"Credit card debt may be a more sensitive barometer of financial well-being than income because it may tap into more long-term deprivation," they wrote.

What were the factors considered?
They considered factors such as the total amount of card debt and available credit, the number of cards used and whether participants carried a balance. The researchers also queried people on vital physical statistics, disabilities, smoking and drinking habits, job status, race and education.

Even when common health barometers such as age were taken into account, debt stress appeared to play a role in participants' physical condition.

Drentea says that people worrying about credit card bills were more likely to smoke and be overweight.

In a 1999 follow-up survey, Lavrakas says many respondents reported heart problems.

"Heart attack was the most prominent health problem we noted," he says.

Second to that were sleeplessness, the inability to control emotions and a loss of concentration.

They believe one reason credit card debt is especially conducive to anxiety is the assumption that it's the result of prodigal habits and, therefore, more embarrassing than being behind on the mortgage or car payment.

"The social view on these people is that they are spending more than they earn, and that is shameful," the researchers wrote.

Debt usually stems from a crisis
The reality is often quite different. Steve Rhode, founder of Myvesta.org , formerly Debt Counselors of America, says the No. 1 reason folks get into trouble with credit cards is a crisis, such as death, divorce or a job loss.

"It's usually something unforeseen," says Rhode, whose agency helps about 200,000 people a month via the Internet, phone and a radio call-in show.

But Rhode believes that many people who are forced to turn to plastic in emergencies do so because they lacked financial clarity. "They have no idea where their money is going, and if they apply for credit and are approved, then they think that must mean they can handle it."

The inability to handle finances wisely isn't always a budgeting problem. Sometimes, low self-esteem and guilt come into play. There is a growing trend in counseling circles to look at these factors. What makes Jim spend compulsively? Why does Jane constantly live on the edge, even though her income is sufficient to meet her needs? And Bob, he's got plenty of dough but he feels worthless because he never earned a penny on his own. He inherited his fortune.

Karen McCall, founder of the Financial Recovery Counseling Institute in San Anselmo, Calif., trains financial advisers and mental health counselors to recognize and deal with these "money disorders."

McCall, whose own financial failures years ago inspired her to start her consulting and educational business, takes a holistic approach.

"People who are not looking at money from a spiritual, emotional and physical angle are all at risk," she says. "This is the cutting edge of working with people and money disorders.

"It's starting to be looked at from a clinical standpoint. I have more therapists as clients than anybody else."

And then there's sudden wealth ...
Another agency in the Bay Area, the Money, Meaning and Choices Institute, counsels people who are troubled by sudden wealth, such as heirs and lottery winners.

But it's the plight of the have-nots which most people identify with. Lavrakas blames much of their problem on eager lenders.

"I think there's an ethical dilemma for financial institutions," he says. "The ease of credit card availability is bordering on dangerous for a number of people. They should think twice and restrain themselves."

That doesn't seem likely to happen. Unpaid revolving debt in the U.S. reached an estimated $713.8 billion at the end of 2001, according to the Federal Reserve Board -- up from $554.2 billion five years ago. The U.S. population is only 284.8 million, so that's $2,848 in debt for each man, woman and child in the country.

With the saturation of the card market, more lenders are going after people with poor credit and low incomes. Technology is giving new meaning to instant gratification. Go to the Internet and get credit card approval in seconds; shop for tax-free goods without having to get out of your chair.

Rhode says Americans need to stop shifting the blame for their credit problems to the banks.

"As long as you're laying the blame at the feet of creditors, no one is going to take responsibility and evaluate their situation."

The key, he believes, is education -- especially for youngsters. Rhode is a big fan of high school kids getting secured credit cards and having their parents teach them how to use them.

"A lot of money behaviors go back to your childhood. You observe your parents and learn from them," he says. "Unfortunately, people in general have never had much financial education."

-- Updated: Feb. 12, 2002