Eye-Opening Ways to Find out Whether Your Debt Is Getting out of Hand

Credit cards have their place in American life, but on an individual basis, it’s easy to let debt get out of control. If you are questioning whether you’ve taken on too much debt, the answer is probably yes.

Maxed out credit cards become a burden, rather than a convenience. Too much debt leaves you unable to save money, pay your bills on time, or plan for the future. 

This can be very stressful and lead to financial chaos in your life. The goal is to prevent your debt from escalating to a level you can’t control.

Take a look at these crucial tips for recognizing if you’re carrying too much debt.

Paying Your Bills Late

Many people miss a due date once in a while because they’re busy and forget to make a payment. But if you’re paying your bills late on purpose, there’s a problem.

Owing more than you can pay each month is a sure sign of debt overload. Paying credit card bills late only makes the problem worse. 

When payments are overdue, credit card companies tack on late fees and higher interest charges. This only adds to your debt and can make it very difficult to get back on track with your minimum payments.

Avoiding Bill Collectors

By the time debt collectors start calling, you have outstanding debt that you may not be able to pay. And debt collectors can be relentless in their pursuit.

You may be able to avoid them for a while, but this could lead to a lawsuit and more trouble for you down the road. If a creditor takes you to court and wins, they can garnish your paycheck or find another way to get their money.

If creditors are calling you, it’s better to answer the phone and try and work with them instead. This can buy you time while you work on paying down your debt.

Maxing Out Your Cards 

With a little frivolous spending or one big emergency, it’s easy to max out your credit cards. Those minimum payments add up fast.

So, what you thought was convenience, becomes a real headache instead.

When you have multiple cards with maxed out balances, you only compound the problem. Your debt can spin out of control and you may not be able to meet the payments each month.

Applying for new cards and spending over your limit will make the problem worse. When you’re in debt and have maxed out your credit cards, you need to seek help and develop a plan to solve your debt issues.

Borrowing Money to Pay Your Bills

When you have financial stability, you have the money you need each month to meet your obligations and pay your bills on time. If you must pay your bills with credit cards or loans from family or friends, you have a debt problem.

Eventually, those credit cards will dry up and friends and family won’t answer the call. At this point, you have to face the financial hole you’ve put yourself in.

The only solution at this point is to reduce your expenses, increase your income, and consolidate your debt.

Saving Seems Impossible

If every bit of money you earn is going for necessities and paying your debts, you can’t save anything for your future. If you don’t want to live this way, you have to make a change.

You may not be able to save a substantial amount right now, but every little bit you put away is better than nothing. When life’s unexpected emergencies pop up, having money in the bank keeps you from taking on even more debt.

Sinking Your Credit Score

Overdue bills and late payments can wreck your credit score. A low credit score can ruin your chances of buying a new home or even getting the job you want.

If your debts have affected your credit score, it’s important to address the issue right away. Unfortunately, the lower your score, the higher your interest rates will be.

Working with your creditors to pay off your debts or consolidating debts into one payment can help raise your credit score over time. The solution is to stick to a long-term plan to lower your expenses while paying off your debts. 

Using Credit for Necessities

A credit card is convenient for buying groceries, gas, and other essentials. You may also earn rewards or cash back for using certain cards.

But if you’re not paying that card off each month, you may have a debt problem. You should only use a credit card for necessities if you can pay it off when the bill is due.

Life’s everyday essentials add up fast. Needing credit to pay for them is a sign of financial trouble.

Hiding Your Debt

If you’re hiding your debt from your spouse, family, friends, or even yourself, your debt is an issue. Sticking your head in the sand will only make the problem worse.

It may not be fun to face it, but there is hope for a better financial future. There are strategies you can use to deal with your debt and make a plan to reduce it.

Once you’ve made steps to recognize the problem, you’ll feel less ashamed and ready to organize your finances and tackle your debt problem.

Losing Sleep 

When you know you’re in over your head financially, it can take a toll on your physical and mental health. Constant worry and sleepless nights will do nothing to lower your debt or fix your financial woes.

At this point, it’s important to face the matter at hand and seek the help of a financial professional. They can help you take a look at the overall picture of what you owe and help you develop a strategic plan for paying off your debts and getting your life back on track.

Avoiding Too Much Debt

Most Americans carry too much debt, and it can spiral out of control before you know it.

If you’re feeling overwhelmed with mounting credit card bills and debt beyond your control, there are solutions that can help. The problem won’t fix itself, so it’s important to get help as soon as possible. 

Let us help you find your financial footing and get on the right path. Contact us today.

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