As I’ve discussed in a previous blog, getting into debt is easy. It’s exciting to buy new and shiny things or take a trip. Or sometimes your hot water heater breaks down and you charge a new one because you don’t have the cash on hand. Once you’ve charged, that’s when the hard part begins. It probably took all of a couple minutes to make some charges, but now you’re looking at paying off debt over a period of years. Here are the top warning signs that you have too much debt:
You’ve Missed or Made Late Payments
Most of us have accidentally made a bill payment late because of chaos in our lives or we simply forgot. But when it becomes a habit or you’re skipping a month, that’s when you know you have a debt problem.
You Avoid Opening Mail
Bills are coming in, but you set them aside without opening them. And it’s not because you’re just busy. You don’t want to see what’s inside.
Your Cards Are Maxed Out
Have you found that you’ve reached your credit limit on a credit card? Then did you move on to the next card? Have you done that more than once? This is a telltale sign that you have too much debt.
You Play the Balance Transfer Game
Sure, balance transfers can be a good thing sometimes. Going from 15.99% to 0% temporarily can save you some money in interest. However, when you transfer a balance you’re also tacking on a balance transfer fee. While that’s not a huge deal if it’s a one to two-time occurrence, if it keeps happening – that’s bad. But the kicker is if you keep playing the balance transfer game and never decrease your credit card balance…or worse, it increases because of fees.
A one-time balance transfer is not necessarily a bad idea. Just keep in mind that if all you’re doing is moving your debt around and not reducing the balance, you’re stuck in a debt trap.
Your Balance Keeps Increasing or Stays the Same
Credit card balances increasing sounds scary, right? But what’s just as scary is continuing to make payments month after month without decreasing the balance or reducing it much. That means you’re either continuing to charge or your minimum payment due is not completely covering the interest charges.
You’re Thinking About Filing Bankruptcy
If you’re behind on payments, you’re likely getting collection calls and probably feeling stressed out. You don’t want to open mail and you’re avoiding dealing with finances because of that stress. So you’re seriously considering filing bankruptcy.
If that’s the case debt is definitely a real issue. But, don’t give up and see that attorney just yet. Determine your options to avoid bankruptcy first. Meeting with a nonprofit, NFCC-Certified financial counselor is the best way to get all of your realistic options to pay off your debt without destroying your credit. Call LSS Financial Counseling at 888.577.2227 for your FREE counseling session. Or, click to GET STARTED ONLINE.
Author Elaina Johannessen is a Program Director at LSS Financial Counseling.