Pentagon Federal Credit Union
Log In Accounts
Search
  • Routing # 256078446
  • Partners
  • Member Discounts
  • Wealth
  • Foundation
  • ATMs & Branches
  • About
  • Search
  • Checking & Savings
    • Checking
      • Free Checking
      • Access America Checking
      • All Checking Accounts
    • Savings
      • Premium Online Savings
      • Regular Savings
      • All Savings Accounts
    • Certificates
      • Money Market Certificate
      • Coverdell Education Certificate
      • All Certificates
    • IRAs
      • IRA Certificate
      • IRA Savings Account
      • All IRAs
    • How Can We Help?
      • Contact Us
      • FAQs
      • Forms
    • Special
      • Access America Checking - Earn more and Get paid early.
  • Credit Cards
    • Our Cards
      • Credit Cards Overview
    • How Can We Help?
      • Contact Us
      • Disclosures
      • Resource Center
    • Special
      • Choose the perfect card - Open Now
  • Auto
    • Auto Loans
      • Purchase
      • Refinance
      • Car Buying Service
    • Protection
      • Vehicle Protection
      • GAP Coverage
      • Debt Protection
    • How Can We Help?
      • Contact Us
      • FAQs
      • Forms
    • Special
      • Unlock your next road trip - Explore Vehicles
  • Mortgage & Home Equity
    • Home
      • Mortgage Home
    • Purchase
      • Apply for a Mortgage
      • PenFed Homes
      • First Time Homebuyer
      • Mortgage Pre-approval
    • HELOC & Refi
      • HELOC
      • Mortgage Refi
    • Loan Types
      • Conventional Loan
      • FHA Loan
      • VA Loan
      • Jumbo Loan
      • VA Refi Loan
    • Tools & Resources
      • Knowledge Center
      • Mortgage Media
      • Mortgage Calculators
      • Contact
    • Special
      • Home affordability sale - View Rates
  • Loans
    • Personal Loans
      • Overview
      • Debt Consolidation
      • Credit Card Consolidation
      • Home Improvement
      • Additional Uses
    • Student Loans
      • Student Loans
    • How Can We Help?
      • Contact Us
      • FAQs
      • Forms
    • Special
      • Personal Loans made easy online
  • Learn
    • Learning Hub
      • Learning Center
      • Mortgage Knowledge Center
      • Financial Assistance Center
      • Natural Disaster Relief Assistance
    • About PenFed
      • About
      • New Members
      • Sponsors
      • FAQs
      • Forms
    • Security & Fraud
      • Security Center
    • How Can We Help?
      • Careers
      • Contact Us
    • Special
      • Learn how we protect your data
  • Join Now
  • Log In
  • Accounts
  • Resources

LEARNING CENTER

To get ahead you have to stay informed.
  1. Learning Center
  2. 9 Facts About Debt

Finance

9 Facts About Debt

EXPECTED READ TIME:5 minutes

Published: June 18, 2024

Updated: July 11, 2024

Debt can be a sensitive subject. It doesn’t help that there are plenty of misconceptions about debt that complicate the subject. Let’s dispel a few of those myths and learn more about how debt really affects our finances.

What We’ll Cover

  • Debt Can Be Stressful — But You Can Take Control
  • Debt Can Be Good
  • You Can Invest if You’re in Debt
  • You Can Access Credit Without Going Into Debt
  • You Can Build Credit Without Credit Card Debt
  • Over Half of Americans Are Carrying Credit Card Debt
  • Credit Card Debt Varies by Generation
  • Saving Is Important, Even if You’re in Debt
  • You Can’t Inherit Debt

1. Debt Can Be Stressful — But You Can Take Control

54% of American adults report sometimes feeling stressed by debt. That stress can affect relationships, health, and even the likelihood of going further into debt.

Importantly, there are many ways you can take control of your debt. The most important step is evaluating your options and creating a plan. Depending on your situation, debt consolidation may be a way to simplify the payoff process. You may also have additional options if you’re carrying medical debt.

pig icon

Here are five ways to get out of credit card debt.

Learn More

2. Debt Can Be Good

Debt gets a bad rap. It’s true that out-of-control debt can have serious consequences, but it’s also true that debt can help you:

  • Invest in your future

  • Build credit

  • Spread out costs to make them more manageable

There are good reasons to take on debt. For instance, you might go into debt for education or training that helps you earn more money or change careers. You could also go into debt starting a business. In these cases, your debt is an investment in a better future.

The trick is to keep debt under control by creating — and sticking to — a realistic payoff plan.

The trick is to keep debt under control by creating — and sticking to — a realistic payoff plan. Creating a budget and tracking your spending can increase your odds of success by helping you avoid taking on additional, unplanned debt.

3. You Can Invest if You’re in Debt

Even if you’re paying off debt, there are still ways you can grow wealth. Open a high-yield savings account and take advantage of employer matches now so you can get the benefit of compound interest. If you find you’re continually dipping into your savings, consider a certificate account.

pig icon

What’s the difference between a certificate and a savings account?

Learn More

4. You Can Access Credit Without Going Into Debt

Credit cards are an expensive way to borrow money because of the interest you’re charged when you carry a balance from month to month. This interest is usually higher than the interest charged for other forms of borrowing like personal loans.

However, if you pay off your balance every month before the interest charges kick in, you can enjoy the convenience of a credit card without the high cost. You can also avoid a host of other fees, too, by using your credit card wisely.

If you pay off your balance every month before the interest charges kick in, you can enjoy the convenience of a credit card without the high cost.

5. You Can Build Credit Without Credit Card Debt

Your credit report is the main way lenders evaluate your creditworthiness. Many people assume the only way to build credit is with credit cards, but that’s not the case. In fact, you can use recurring payments on expenses like rent, utilities, and cell phone bills to build a healthy credit history without the added cost of interest.

6. Over Half of Americans Are Carrying Credit Card Debt

Debt can feel isolating, but you’re not alone if you’re carry a balance. As of November 2023, over half of Americans (56%) had outstanding balances on their credit cards, and one in three If Americans have more credit card debt than savings.

pig icon

Here’s how to build credit without a credit card.

Learn More

7. Credit Card Debt Varies by Generation

Some generations are not only more likely to have debt, but also tend to carry larger balances. As of 2023, Gen X carries an average of $9,123 of credit card debt, the largest of any current generation. Baby Boomers and Millennials carried the second and third largest averages, followed by the Silent Generation and Gen Z.

Credit Card Debt by Generation

Average credit card debt load varies by generation with Gen X carrying the largest average balance, and the youngest demographic — Gen Z — carrying the smallest.

Generation

Average Debt Load

Silent Generation 
(born before 1947)

$3,412

Baby Boomers 
(born 1947-1965)

$6,642

Gen X 
(born 1966-1981)

$9,123

Millennials 
(born 1982-1997)

$6,521

Gen Z 
(born 1998-2006)

$3,262

Data from Experian’s Average Credit Card Debt Increases 10% to $6,501 in 2023. Current as of March 2024

8. Saving Is Important, Even if You’re in Debt

Saving may seem especially hard if you have debt, but it’s important. Regularly saving in a high-yield savings account and building an emergency fund will provide buffers against unplanned debt. It’s this unplanned debt that’s often the hardest to pay off and most stressful.

Saving may seem especially hard if you have debt, but it’s important.

9. You Can’t Inherit Debt

Debt belongs to the person whose name is on that line of credit. If your loved one passes, you won’t be responsible for their debt unless you have cosigned with them. In this case, their debt is also your debt from the time you signed on the dotted line.

pig icon

What’s the difference between a cosigner and a co-borrower?

Find Out

The Takeaway

Debt is a powerful financial tool. Knowing the facts about debt is empowering. It erases shame and enables you to manage your finances with more confidence.

Invest in Your Future

See current certificate rates and terms.

Learn More

SIMILAR ARTICLES

Soft Credit Check vs. Hard Credit Check: What’s the Difference?

Understanding the differences between soft and hard credit checks can help you better manage your finances.

Why Is It a Share Account Instead of a Savings Account?

Good vs. Bad Debt: What You Should Know

Learning to distinguish between good and bad debt can help you enjoy a more financially sound life.

4 Features Your Checking Account Should Have

How to Build Credit Without a Credit Card

A credit card is just one way to build credit. Check out these five little-known methods for boosting your score without applying for a card.

What To Expect From Your Checking Account

5 Proven Ways to Save Money Fast

Kickstart a savings plan and start building a strong foundation for wealth in no time with these tried-and-true strategies.

How Do Checking Accounts Work?
  • ATMs & Branches
  • Careers
  • Foundation
  • Contact Us
  • Security Center

This credit union is federally insured by the National Credit Union Administration. Rates are current as of May 2025 unless otherwise noted and are subject to change.

APY = Annual Percentage Yield
APR = Annual Percentage Rate


  • facebook
  • twitter
  • linkedin
  • youtube
  • instagram
Download the PenFed app on Apple Store Download the PenFed app on Google Play
Read More about Equal Housing
Routing #256078446

©2025 Pentagon Federal Credit Union

Privacy
Disclosures
Fees
Rates
Forms
Site Map

Head’s Up!

You are about to visit a third-party site not affiliated with PenFed.org.

penfedcu.sparrowfi.com sparrowfi.com penfed and traveller logo penfed and seguros logo penfed and national car logo penfed and trustage logo PenFed and CampusDoor logo PenFed and Ascent logo PenFed and Ascent logo penfed and househappy logo penfed and benefit services logo penfed and chubb logo penfed and alpha logo penfed and crutchfield logo penfed and ftd logo

This content is from a third-party website. PenFed Credit Union is not responsible for its information.

Continue

Get Started

×

LOGIN

JOIN