Too Much Debt - The Warning Signs Of Having Too Much Debt
Debt is a way of life for most people. A lot of us carry debt in one form or the other. Good debt helps you gain some speed and helps you to do things you otherwise would have had to wait along time for. But when debt gets out of control, it starts to affect you in a lot of bad ways. Your health and relationships may start to suffer. It is therefore important to know when you have too much debt. The following are some of the ways to know if you have too much debt.
Buying basic necessities with a credit card.
You should not need to pay for day to day necessities like gas and groceries with credit cards. This is a sign of a big problem. Your monthly budget should allow for them without recourse to credit. Credit card dependency is detrimental to your finances. Using credit cards for everyday purchases can cost you several times the original amount in interest and late fees.
Opening new credit accounts to meet up with your expenses
Having many different sources of credit is not a bad thing in itself but when you start borrowing from Peter to pay Paul there is a big problem. If you use cash advances from your credit cards to pay other bills and you have to keep opening new credit card accounts to have money to spend then you are in too much debt.
You dont know how much you owe
When you have no idea how much debt or how many cards you have, you are probably carrying too much debt. You don't have to know your debts to the last penny but if tracking your debts has become a complex process then there is a big problem.
Lost savings
The ability to put a little money apart every month is a sign of a healthy budget. If you dont have enough money to put into savings, you need to check your budget. Unexpected expenses can put you in more debt when you don't have any savings. If debt has caused you to lose your savings then your debt is too much.
You only make the minimum payment on your credit cards each month.
If you are able to service only the minimum balance on your debts, you will remain in debt perpetually. However, if you are paying the maximum you can afford and your balances are still rising, then there are problems ahead.
Your credit card is near, at, or over the credit limit.
You have to be careful when you have one or more credit cards that are maxed out. A big sign of debt trouble is when your cards start being declined.
These are just a few of the tell tail signs that you have too much debt. If you these signs apply to you then you need to seek professional help to get out of debt.
Check out the link below
Debt Information Center the internet's No.1 center for free information on debt management and consolidation.
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