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No, the damage is much broader. It harms your mental and physical health through chronic stress, strains personal relationships, limits your ability to save for the future, and can even impact job prospects if an employer checks your credit.
A DMP, administered by a credit counseling agency, consolidates payments and negotiates lower interest rates with creditors. It requires closing credit cards but can simplify repayment.
The most common factor is a structural gap between income and the cost of living. When wages stagnate while expenses for essentials like housing, healthcare, and education rise, individuals rely on credit to bridge the gap, not for luxuries but for basic stability.
BNPL can seem cheaper for a single purchase if you pay on time, as it avoids credit card interest. However, a credit card offers more consumer protections (like chargeback rights) and a consolidated view of all debt. BNPL's fragmentation of debt is a key danger.
It is generally considered a last resort for individuals with significant unsecured debt who cannot qualify for a DMP or consolidation loan and for whom bankruptcy is not an option or is undesirable, though the risks are very high.