What financial therapists want you to know about your maxed out credit cards

Anyone who’s ever maxed out a credit card knows the unique pain it brings. There’s deep frustration. There’s shame and embarrassment. There’s the fear of looking at a credit card statement and seeing a balance that brings a sense of helplessness.

But there’s also the reality: A maxed out credit card is a common problem, and you can find ways to cope with it — both financially and emotionally. In fact, experts say there may be more to the emotional side of things than you might give credit for.

We spoke with Dr. Megan McCoy and LaQuishia Clemons, two certified financial therapists, for advice on how people with high credit card balances can move forward and make a plan to pay them off. Here’s what they shared, including the tips they offered on coping with maxed out credit cards.

Americans maxing out their credit cards

A maxed out credit card limit is a somewhat common problem. Almost 2 in 5 cardholders (37 percent) have maxed out a credit card or come close since the Fed started raising interest rates in March 2022, according to Bankrate’s 2024 Credit Utilization Survey.

Additionally, as of June 2024 polling, half (50 percent) of credit card users carry credit card debt from month to month, according to Bankrate’s latest Credit Card Debt Survey. 

Over half of cardholders who’ve maxed out their credit card or come close since March 2022 (54 percent) say inflation or high prices are to blame. Other common reasons include emergency expenses (38 percent), carrying a balance or having credit card debt (32 percent) and job or income loss (25 percent).

The most common consequence of it all? Stress. Specifically, 51 percent of those who maxed out their credit cards or came close reported feeling stressed about their finances. 

However, according to Dr. Megan McCoy, an assistant professor at Kansas State University’s personal financial planning program, this road goes both ways. 

McCoy is a licensed marriage and family therapist, an accredited financial counselor and a certified financial therapist. She has published over 40 articles on mental health, family science, financial counseling, and financial planning journals. 

Mental health and maxed out credit cards

A maxed out credit card is perhaps as much an emotional issue as it is a financial one.

For people struggling with mental health issues, such as anxiety or depression, impulse control might be more challenging — and that applies to their spending too. Plus, they might be overspending to make themselves feel better, McCoy says.

On top of it all, using a credit card feels easy. Whether it’s to pay for an emergency expense or an unplanned purchase, it almost doesn’t feel real. There’s no cash exchanging hands. The balance on your checking account remains the same. 

“When we give someone our credit card, then we actually get it back right away,” McCoy says. “It doesn’t hurt as much to just spend on a credit card than it does with cash.”

Of course, that sense is false. And that truth can be hard to face.

Oftentimes, cardholders with maxed out cards will avoid looking at their card statements, according to LaQueshia Clemons, a clinical social worker and an accredited financial counselor. Clemons runs Freedom Life Therapy and Wellness, a private practice specializing in financial therapy.

Such avoidance can cause people to move on from one card to another, Clemons says. That cycle can continue until they can’t afford their minimum payments anymore. The debts pile up along with new layers of anxiety.

As you can see, with enough denial, maxing out a credit card can turn from a coping mechanism into serious financial – and mental — challenges. For that reason, it’s best to face the problem head-on as soon as you can.

How to get out of the cycle

Since maxing out a credit card is both a practical and emotional issue, it requires “both problem-focused coping and emotion-focused coping,” McCoy says.

With that, here are both types of solutions the two therapists recommend:

• Track your spending
  

  Let’s start with practical matters. First, address your spending patterns and determine where your money is going. Note that it doesn’t mean you need to get on such a strict budget you “eat ramen every day”, McCoy says.

  “People think you have to cut everything out,” she explains. “That is not what I want for people. I want to help people find balance and differentiate.”

  That means instead of creating a budget you’ll have a hard time following, you need to be intentional about where you’re spending your money. Which purchases really bring you joy? Which purchases help you feel gratitude rather than allow you to act on impulse?

  And while this practice focuses on solving the problem at hand, it can still bring out some feelings — so be ready for those.

  “When my clients go through it, when they start to see what they’re spending on and how it affects them, it can get very emotional,” says Clemons.

• Write down a plan
  

  There are many methods you can choose from to pay off your credit card debt. Whichever method you decide to use, write down the steps you’re going to take.

  “When I say write things down, I mean literally pen and paper, because writing things down for a lot of people makes it real,” Clemons says.

  This goes back to the issue of credit card spending not feeling real. When you shop online, you press some buttons in an app or a browser. When you’re at a store in person, you pay with a credit card instead of cash. Reverse that feeling by creating a real, material plan with steps you can physically check off.

  “Writing it down then makes it more realistic,” Clemons says. “You’re then facing that reality of [having] this debt… and now you’re ready to come to grips with it.”

• Find ways to experience joy without spending money
  

  When you change your spending habits, it can feel restrictive. It might be eye-opening to see how many things we find crucial for wellness come with expenses. However, it doesn’t mean you need to give up on these things. On the contrary, dealing with debt brings out a lot of negative emotions — you can feel overwhelmed and even ashamed. And to overcome such feelings, you need to be able to find healthy ways to cope.

  “What are the ways you can connect with friends that don’t involve money?” McCoy says. “What are the ways to enjoy nature that don’t cost money? What are the ways to exercise that don’t cost money?”

  Think about activities that bring you joy and look for ways to enjoy them without spending money. This way, you’ll continue practicing self-care without adding to your debt.

• Seek help if you need it
  

  Paying down maxed out credit cards can be a huge challenge. Remember that you don’t have to do it alone. Help is available.

  Look into credit counseling offered by nonprofit organizations. Certified credit counselors can help you come up with solutions and connect you with additional resources.

  Financial therapy is another route you can explore. In this case, you’ll also focus on your relationship with money.

  “A lot of time your employee assistance program has a free financial counselor,” McCoy says, “or there are pro bono financial counselors you can get through the organization called AFCPE and create a plan that works for you.”

  Again, the goal of this type of plan “isn’t cutting out every little pleasure in your life.” Rather, it’s to look at how you’re spending and begin to take small steps toward your financial goals.

The bottom line

Many Americans are all too familiar with the dread of maxed out credit cards. If you’re one of them, don’t feel embarrassed. 

Focus on solutions by doing what’s best both for your mental health and your wallet. Track your spending and write down a plan. Seek extra support if you need to.

“Just remain consistent and you will get there,” Clemons says. “It may take some time, but that’s okay.”