How social media leads some users into debt

How social media leads some users into debt

It’s been six months since the day Erin’s husband stopped talking to her.

She laughs when she mentions the seven days of the silent treatment, a distinctly Midwestern shrug that makes its way along Iowa phone lines. The laugh seems intended to reframe her tribulations and make them feel manageable, but it was the very unmanageability of her social media-fueled compulsive shopping habits, and the debt that they accrued, that led her to turn to her husband for support. Instead, he offered silence.

Erin — who, like the other shoppers I spoke to for this piece, asked to be referred to by a pseudonym to speak openly about her finances — says she is accustomed to carrying some credit card debt, usually on retailer credit cards she opens to take advantage of their sign-up promotions. In the past, she was able to pay off those balances efficiently, but with the synchronous blows dealt by the pandemic — she was laid off, her two kids began homeschooling, her social life evaporated — her household income and personal time dwindled, and her shopping habits escalated.

“I’m home with my kids all day, and I’m looking to escape somehow,” she says. Like many people, Erin turned to social media. And social media — a landscape increasingly strewn with consumerism land mines like targeted ads, sponsored content, and influencer fashion hauls — deposited her directly into online shopping.

Her monthly spending on personal items reached between $2,000 and $3,000 last fall as she ordered pop-print Banana Republic blouses and influencer-endorsed Old Navy staples, all served to her on a social media platter on her Instagram Explore page. She remembers lying to her husband, hiding stacks of packages, or shrugging off his questions about a new outfit. Finally, the scales tipped, and she came clean. “He didn’t talk to me for a week. We had to go to couples counseling to try to get over it.”

The couple paid off her credit cards, totaling some $3,000, together, and Erin, determined to rebuild both her husband’s trust and her own financial stability, started anew. “I was doing better this winter — still spending a lot but not doing anything really secretive,” she says. But when she opened a new card again this spring, it “spiraled out of control.”

Erin’s compulsive shopping, she says, is tied inextricably to her social media use, particularly Instagram, and her habits probably look familiar. Confined to our homes, clad in sweats, millions of Americans mindlessly scroll through their social feeds and find escape in the lives of influencers who, miraculously, seem to have escaped the pandemic with a smile and better skin. Even if you haven’t stepped into the bear trap of social media shopping, you almost certainly know someone who has.

Which is exactly what these platforms and creators are aiming for. With each “like” and purchase, the bank accounts of social media companies, brands, and influencers rise, and those of their audience fall. When the expenses exceed the limits of shoppers’ expendable income, those purchases can drive social media users into debt. But in a paradoxical twist, a growing contingent of influencers and social media communities are using the very platforms designed to promote consumerism to try to thwart it.

While we are a nation divided politically, regionally, and culturally, we are united by our shared aversion to conversations about money. According to an often-quoted 2018 survey, Americans are more comfortable talking to friends about marriage problems, mental illness, drug addiction, race, sex, politics, and religion than they are about money. Debt, its accumulation and mitigation, is a particularly cringe-worthy topic.

As of the fourth quarter of 2020, consumer credit card debt in America is sitting at an astounding $819 billion, with a $12 billion increase in the last quarter alone. More than 191 million Americans — about 90 percent of adults — have credit cards, and households with credit card debt carry an average balance of $5,315. The great irony is that, despite our aversion to discussing it, its prevalence means credit card debt is perceived as normal, making it difficult for those who are plagued by it to seek help.

Julia found herself in over her head due to a potent combination of medical debt, a high interest rate, and social media shopping. The last piece is one of the most frustrating. “I have $30,000 of debt that I accrued $20 at a time, and that is horrifying,” she admits, noting that about half of those purchases were driven directly by Instagram ads and influencers. Compulsive shopping — the habit of obsessively shopping to the detriment of other areas of your life, even if it’s just one $20 purchase at a time — is a frequent harbinger of credit card debt. According to one study, more than 58 percent of these shoppers accumulated large debts as a result of their habit.

In many cases, those debts are characterized by bingeing or, as Monica calls it, “splurges.” She’ll save money for a couple of weeks, she says, but once she makes one purchase, “I see myself going to shopping apps or through social media looking to buy something else.” Her all-or-nothing habits take her credit card debt from zero to $1,000 to $2,000 every month.

Whether their credit card debt is analogous to a yo-yo or a snowball, most Americans aren’t equipped with the knowledge or skills to navigate it. Financial literacy is still largely absent from most public school curriculums; only 21 states require high school students to enroll in courses with a personal finance curriculum (another survey with more exacting standards pointed out that only six states require actual personal finance courses). Most financial education is left up to parents, who themselves are often ill-equipped to pass on instructions. Julia, for example, was taught financial literacy by her parents in simple terms: Debt equals bad. Her frustration is palpable when she adds, “But what that does is it teaches you to be a shitty steward of debt.”

It’s this lack of financial know-how that makes the glamorized consumerism traded in social media posts so damn dangerous, especially for users already prone to compulsive shopping. The debt that results carries with it heavy emotional and mental baggage.

“Studies have supported a link between debt and mood disorders, particularly anxiety and depression,” says Pria Alpern, a licensed clinical psychologist in New York City, the owner of Center Psychology Group and a special adjunct clinical professor at LIU Brooklyn. “When debt is related to compulsive shopping, there is an added experiential layer of shame and helplessness.”

Erin, Julia, and Monica all use a smattering of synonyms to describe the feelings around their social media-induced shopping and debt: “embarrassed,” “shame,” “disappointed in myself.” The effects of these debts aren’t just personal; their sense of guilt extends beyond their shame in their behavior to the impact they’re having on their family’s finances. That’s coupled with hopelessness, which is exacerbated by that national perception of debt as something normal and surmountable. Erin says that when she’s tried to reach out to friends or even her therapist about her issues with compulsive spending, they did not perceive it as problematic, though they were “not dismissive about it.”

While it’s not technically categorized as an addiction, Alpern says, “Research has found that compulsive shopping is associated with the release of dopamine and endorphins in the brain’s reward center.” Positive social stimuli from social media also releases dopamine, meaning those who find their compulsive shopping being triggered by social media are in effect battling two simultaneous addictions. When influencers and ads proffer products via staged photos, it’s practically irresistible for these women and thousands of other social media users. Which has been the intention of the advertising industry for decades.

“From a very early point in time, there was this unholy marriage between media and advertisers, both of which had a strong motivation to push products,” says Yotam Ophir, an assistant professor of communication at SUNY Buffalo, who explains that the advancement of consumerism via media outlets — TV, radio, newspapers, and now social media — is nothing new.

The problem, Ophir points out, is that people don’t like overt advertising because it suspends our engagement and “also because we hate being told what to do.” Enter product placement, which integrated advertising into viewers’ media without disrupting their experience. Product placement also capitalizes on the viewer’s trust: If we like the characters and they’re using a product, we might be more likely to purchase that product for ourselves. It’s similar to the time-tested concept of opinion leaders, everyday folks whom the public might turn for advice. Ophir contends that, while we might not trust the media, we do trust opinion leaders. And in 2021, “opinion leaders” and “product placement” sound a lot like “influencers” and “social media marketing” with rearranged syllables.

While early, blatant iterations of social media marketing like “tummy tea” and body wraps might elicit a nationwide eye roll, modern influencer marketing is so dexterously and perpetually woven into social media content, it’s almost impossible to spot. Skin care regimens, fashion trends, and housewares, hocked through tutorials and editorial-style imagery and unboxings — influencers are constantly selling and profiting off your engagement, making money from sponsored posts (the mandatory ad disclosure often buried in a sea of hashtags) and affiliate link commissions.

Influencers make a living by encouraging their followers to buy the products they endorse, and it works because they’re opinion leaders. Back in 2016, a survey found that 82 percent of consumers were highly likely to follow the recommendation of a micro-influencer they followed, which is exactly what leads some social media users to make purchases they can’t afford.

“This is going to sound very elitist, but I’ve always kind of considered myself above influencers,” Julia says. Yet, she says, it’s one of her favorite Instagram influencers who has led her to make many of her unaffordable purchases, in large part because Julia trusts her. “I would say her values mirror my own,” she says of the influencer who, like Julia, is into CrossFit, clean beauty, and healthy eating. If the influencer recommends a product, Julia will buy it, because she trusts that the influencer has done her “due diligence.”

But that sense of trust also functions as a manipulative tool of persuasion, as Ophir noted. Julia says this influencer is a representative for Beautycounter (the millennial version of Mary Kay); when she recommended a skin care regimen, Julia, grappling with pandemic-era mascne, fell hook, line, and sinker. “I spent $600 in one go on products,” she pauses, then adds, “That was a mistake.”

Monica — like Julia and Erin — acknowledges that Instagram is her greatest shopping trigger, citing the escalation of brand content and introduction of the new Shop tab as the impetus for her increased spending. It’s that shopping tab that exemplifies the more overt correlative to the consumerism pushed by influencers: targeted ads, shopping pages, and brand posts in which users can simply tap to access shopping links.

As Ophir says, none of us like blatant advertising, but that doesn’t mean we don’t fall for it, especially when social media companies use the very information we feed them by engaging with influencers — in addition to our Google searches and the literal words we speak — to inundate us with bull’s-eye advertising. Engaging with that advertising, in turn, pushes more of that same content into our feeds. “All I was doing was feeding my phone information about my insecurities, and it was dumping back out products that promised to fix them,” Julia says.

2021’s social media marketing isn’t just savvy; it’s practically omniscient. Couple that with the increasing integration of direct shopping capabilities into apps, as Vox’s Terry Nguyen recently wrote, and social media is a booby trap for those struggling with credit card debt. In fact, studies by Andrew T. Stephen, L’Oréal professor of marketing at the University of Oxford’s Saïd Business School, have indicated a direct correlation between social media use, credit card debt, and low credit scores. In a paper he co-authored in the Journal of Marketing in 2017, for instance, he told Vox he found “that time spent using social media can lead to future online shopping and also some evidence that social media use puts people into a ‘consumerist’ mindset,” adding that the result was stronger for purchases defined as “impulse” or “unplanned” ones. There’s evidence that scrolling turns off our sense of self-control, leading to “poorer decision-making with financial consequences.”

Social media already represented a panoply of temptations for those grappling with compulsive shopping and debt and then the pandemic arrived, bringing with it a bevy of emotional triggers — anxiety, isolation, loneliness — that drove their habits to escalate. While impulse purchases may afford temporary relief from loneliness or boredom, they only swap one stressor for another.

Scroll through a shopping addiction subreddit and you’ll see hundreds of users making the connection between their compulsive shopping and social media. They encourage deleting apps, unfollowing tempting pages, restricting screen time. But as these message streams indicate, the very solution to social media’s hyper-consumerism may lie in social media itself.

Nika Booth started her Instagram page, @debtfreegonnabe, as a way to document her journey to tackle $133,000 in student loan debt and $40,000 in credit card debt. “I realized sharing my own journey was impacting and inspiring other people to take control of their money,” she says. She flashes an infectious smile, and it’s easy to see how she’s garnered a following of nearly 33,000.

Booth, like so many debtors, attributes much of her credit card debt to comparison and FOMO instigated by social media. She’d swipe her card for impromptu trips to Miami with friends or after seeing an influencer model a purse on social media. Now she’s on track to pay off her last credit card this year, and she’s sharing her experience with her followers, 92 percent of whom are women. Her followers connect with her exactly because she looks and feels relatable, and there’s a growing contingent of money-savvy women (and specifically women of color, like Booth) taking to social media to preach the debt-free gospel.

Even some more traditional influencers are experiencing a bit of a consumerism awakening. Jess Ann Kirby began her fashion and lifestyle blog nearly seven years ago and has amassed some 138,000 Instagram followers in the time since. As a full-time influencer, she acquired a lot of stuff, which eventually led her to a Marie Kondo-style reckoning two years ago. Kirby reassessed her values and lifestyle in order to lessen her environmental impact, and her brand transitioned in the process.

As she began to shift into conscious consumerism with posts about curated capsule wardrobes and sustainable bedding, she communicated her intention to her audience, playing the role of opinion leader while acknowledging the pitfalls of consumerism. “I was really transparent with my community the whole time, just saying, ‘I got sucked in. I really just got pulled into this dopamine hit every time you make that purchase,’” she recalls.

Kirby is also conscious of the financial impact the influencer space can have on its audience, and she believes that her representation of more conscious consumerism responds to that: “For those of us with a platform, we do have a responsibility to care about the people who are in our community.”

While the rise of influencers repping a #debtfree lifestyle and conscious consumerism might feel a bit like David in the fight against social media’s Goliath-like materialism, there’s also the chance that the current social media marketing model might cannibalize itself. Ophir posits that as social media users begin to recognize the salesmanship of influencers, they may resist it. Another possibility he considers is that there will be increased regulation of the advertising reach of social media. Given Apple’s latest software update, which included the new app tracking transparency (ATT) designed to give users more control of their data — and, as a result, social media’s ability to refine their targeted ads — this is a real possibility. “But then I kind of assume they will find a new way,” Ophir says with a laugh.

But maybe the solution lies not in influencers or structural impacts to social media but in its users themselves. Erin has turned to self-help podcasts, motivational YouTubers, and the Reddit shopping addiction community for help in navigating her social media-induced compulsive shopping, and it’s the latter — “having the support of people who understand what I’m going through,” she says — that’s been most helpful.

Erin lists some of the strategies she’s implemented that she gleaned from the platform: She’s already put a block on her credit card and removed her card information from her favorite websites. She is shifting her perspective, placing her current circumstances into the framework of the entirety of her life. Her goal now, she says, is to grow through this experience and “hopefully help other people someday, too.”

Maybe, if you’re reading this, she already has.