15 Signs That You Are in Serious Debt Trouble
- Your credit card balances are rising while your income is decreasing.
- You are only paying the minimum amounts required on your accounts, or maybe even less than the minimums.
- You're juggling bills. For example, you apply for another credit card and use cash advances from it to pay an existing card.
- You have more credit cards than a successful gambler has poker chips.
- You are at or perilously near the limit on each of your credit cards.
- You consistently charge more each month than you make in payments.
- You are working overtime to keep up with your credit card payments.
- You don't know how much you owe and really don't want to find out.
- You have received phone calls or letters about delinquent bill payments.
- You are using your credit card to buy necessities like food or gasoline.
- Your credit cards are no longer used for the sake of convenience, but because you don't have money.
- You are dipping into savings or your IRA to pay your monthly bills.
- You are hiding the true cost of your purchases from your spouse.
- You're playing the card game by signing up for every credit card that sends you an unsolicited offer.
- You have just lost your job, or are fearful that you are about to, and are concerned about how you will pay all your bills.
There's no magic number of statements with which you must agree to determine if you have a credit problem. Even if you see yourself in several of these instances, you still might be able to deal with your credit crunch on your own.
But if you spot a trend, beware.
For example, don't panic if you occasionally shop surreptitiously, not letting the spouse in on your splurge. "Anybody might do this once or twice," says Debby Vinyard, co-owner of Vinyard Financial Planning and Associates, in Marion, Ill. "But if it's becoming routine, you probably have a problem."
Similarly, paying the minimum balances once in a while could be acceptable. But if it's more than an isolated money management misstep, you could be headed for trouble.
"If you see some of these warning signs, you need to take a serious look and find out why," Vinyard says. "Maybe it's something temporary. You're between jobs.
"But if it's becoming a bad pattern, you need to be honest. Admitting you have a problem will go at least halfway toward solving it."
Read more about debt management at Bank Rate.
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