11 Debt Freedom Myths To Stop Falling For

Debt can feel overwhelming, and bad advice often makes it worse. To get debt-free, forget outdated rules, focus on facts, and take action. Here are eleven debt freedom myths you should stop believing.

You Need To Close All Credit Cards Once They’re Paid Off

You may think closing credit cards is the final step once you’ve cleared the balances, but it’s not. Closing a credit card can actually hurt your credit score by reducing your available credit and shortening your credit history. Instead, keep accounts open, use them occasionally, and pay them off each month. This keeps your credit profile healthy without adding debt.

Every Debt Must Be Paid Off Before You Save Money

Many people believe debt has to go before anything else, but this isn’t always best. Rushing to pay off debt without setting up an emergency fund can put you in a worse position if unexpected expenses pop up. Instead aim for a balance: paying off debt while building some savings so you don’t end up relying on credit again.

Debt Freedom Makes Your Credit Score Perfect

Paying off debt is great, but it doesn’t erase your credit history overnight. Negative marks like late payments can stay on your credit report for up to seven years, no matter how much debt you’ve paid off. Focus on making steady payments, correcting errors, and building new positive credit habits instead of waiting for an instant credit boost.

You Should Settle All Debts Instead of Paying Them in Full

Debt settlement sounds like an easy way out, but it can have long-term consequences. Settled debts are marked on your credit report and might cause your score to drop. Plus, it can take years for settled amounts to fall off your record, making lenders less willing to work with you. Whenever possible, aim for full repayment or other solutions like consolidation.

Making Minimum Payments is Enough to Stay on Track

Sure, sending in minimum payments keeps creditors off your back for now, but it traps you in a vicious cycle. Minimums don’t tackle the principal, so you’ll pay far more in interest over time. It’s a strategy that benefits lenders way more than it helps you. Even small extra payments can make a dent in your balance and shave years off repayment.

Budgeting To Pay Off Debt Removes All Fun From Life

People often assume budgeting means a dull, joyless existence where you deny yourself everything. This just isn’t true. A good budget gives you control and allows for some guilt-free spending. It’s about managing money wisely, not cutting out every treat or celebration. Debt freedom doesn’t mean life has to be miserable while you’re working toward it.

All Debt is Bad Debt

Not all debt is equal. Mortgages can build wealth, while credit card debt on impulse buys doesn’t. Knowing the difference between “good” and “bad” debt helps you focus on repayment and borrow wisely. Debt isn’t the problem—it’s how you manage it.

Seeking Debt Relief Ruins Your Credit Forever

Debt relief programs sometimes get a bad rap, but they aren’t a one-way ticket to financial ruin. Debt consolidation or management plans can actually improve your credit by helping you make regular payments and reduce interest rates. The key is choosing the right approach and working with trustworthy professionals—not falling for scams or quick fixes.

Married Couples Share Each Other’s Debts Automatically

Marriage doesn’t turn individual debt into joint debt. Unless you co-signed a loan or opened a joint account, you’re only responsible for your own. However, shared financial habits or overspending together can still affect your credit. Being clear about who owes what and setting shared financial goals helps keep things fair and stress-free.

Paying Off Debt Removes it From Your Credit Report Immediately

Paying off a debt doesn’t erase it from your credit history. Both good and bad marks stay on your report for years. Lenders can still see things like late payments or collections even after the balance is gone. The upside? Paid debts look much better than unpaid ones over time.

You Can’t Become Debt-Free Without a High Income

A lot of people assume you need to make six figures to break free from debt. That’s not true. Plenty of people work their way out of debt on modest incomes through better budgeting and side hustles. It’s more about consistency and discipline than how much money you bring in. Taking small, steady steps beats waiting for a windfall.

Change the Way You See Debt Freedom

Debt freedom isn’t about strict rules or perfection. It’s about understanding money, ditching false beliefs, and finding a plan that works for you. Letting go of these common myths helps you build a realistic and lasting path to financial freedom.

5 Crucial Tips To Pay Off Debt Fast and Live Debt-Free

Money touches every part of our lives, impacting our decisions, relationships, and mental health. But if you’re in debt, you’re not alone, and you can turn your finances around. Getting out of debt quickly is possible if you take the proper steps.

Read it Here: These 5 Habits Will Help You Pay Off Debt Fast and Live Debt-Free

How to Drastically Cut Expenses to Get Out of Debt Quickly

Cutting expenses to the bone is scary and overwhelming to most people. But when you’re deeply in debt and feeling lost, you begin to search for any opportunity to shorten your everyday expenses list. Try these tips to cut expenses and pay down debt fast.

Read it Here: How to Drastically Cut Expenses to Get Out of Debt Quickly