Often times, people don't notice a problem until it is too late, and the damage is already done. This often happens with debt, people know they have some debt, but they don't exactly realize how much or how many problems it is causing. Here are four signs that you are in debt trouble:
Putting Every Day Expenses on Credit
Unless you have a credit card that earns you rewards, and you pay it off every month, you should never put every day expenses like groceries on your credit card. If you can't get by without putting groceries or every day bills on credit, you need to revaluate your money situation. If you can't afford things like food and rent, you are probably living above your means. This is never good and if you continue to do this, you will have a harder and harder time digging out of debt.
Not Paying Above the Minimum
You should always be able to afford to pay at least twice the minimum amount due on a credit card. If you can't, you are in serious trouble. Paying the minimum on cards, while it will keep the collectors from calling, will never get you out of debt. When you pay the minimum to cards, you are pretty much just paying off the interest rate, but no actual principal.
Taking Every Increase
If you find yourself accepting every credit line increase the credit card companies offer you, and even asking for more, this is a sign of serious debt. Every time you do this, you give yourself more opportunity to spend money, instead of paying off what you owe. Credit card companies don't do this to help you; they do it to help themselves. If they can get you to put twice what you usually do on one of their credit cards, they are making a lot more money, regardless of how much it harms your credit.
Bill Collectors Keep Calling
I know it sounds obvious, but a lot of people think that if they just ignore the bill collectors, it won't matter. Even if it is for a few bucks, and you don't think you should owe it, you still need to resolve the issue. Every time you avoid those calls, and don't pay the money you owe, a bad mark is going on your credit report. It may only be a few bucks to the phone company, but if they report it on your credit, it could significantly lower your credit score, and prevent you from getting credit in the future. |
