Debt has practically become a national pastime. The United States and its citizens largely run on credit. While credit can be a great convenience, it can also create major financial challenges. Carrying too much debt creates a lot of additional costs and stress that are unnecessary. Anyone who’s had a sleepless night because of debt knows how much it can negatively influence your life.
Most of us are used to having a significant amount of debt. But, how much is too much?
Look for these warning signs of debt problems which might indicate that you are carrying too much debt:
Carrying A Credit Card Balance
If you’re carrying a credit card balance each month, it’s critical to your financial health to pay this debt down. If you’re unable to pay it off, that’s a sign that you have too much debt.
Using Credit Cards To Pay For Everyday Items
Using a credit card to buy food or pay your utility bills is another sign your debt might be out of control. If you lack the money to pay your routine bills, it might be time to face your debt.
Making The Minimum Payments On Your Credit Cards
The minimum payment amounts are designed to keep you paying for an eternity. The less you’re paying on the principal, the more you’ll be paying in the long run. If you’re unable to pay more each month, you’re on a slippery slope.
Regularly Making Late Payments
Many people think that credit card companies get most of their income from interest, but studies have shown that it’s actually the late fees that account for most of their income.
- Regardless of the type of bill, if your payments are regularly late, you’re paying a lot more than necessary. It’s also one of the warning signs of debt trouble.
Using Payday Loans
Payday loans can be thought of as credit cards for those that are either unable to get a credit card or that have hit their credit limits. Payday loans are perhaps the worst loan you can get.
These loan companies get around state usury laws by charging outrageous fees. This is the only way they can legally make as much money as they do.
Lying To Others About Your Finances
It’s easy to argue that your finances are nobody else’s business. If you’re lying to family members about your spending habits and your financial well-being, there might be an issue.
Not Having Any Savings
One sign of financial health is the ability to save money regularly. If your monthly finances aren’t allowing for a regular contribution to your savings account, you’re probably playing with fire.
Carrying too much debt is a common occurrence in the United States. Debt can be likened to climbing a mountain with a boulder on your back. When you start to identify warning signs of debt crisis, it’s high time that you do something about it. The solution might be as simple as cutting back or as severe as filing for bankruptcy.
Assess your debt and put a plan into place that will ease your financial burden. You’ll be glad you did.
- Tips for Climbing Out of Debt and Paying Off Your Credit Cards
- Dealing With Debt Collectors: What They Can and Can’t do
- Understanding How Debt Management Plans and Credit Counseling Works