Credit cards can seem like lifesavers when you want or need to make a large purchase. It’s so easy; it’s like buying something on someone else’s dime.
That is until you overextend yourself and realize that what you will ultimately spend goes way beyond the initial purchase price. And credit card issuers are quite skilled in luring innocent consumers with affordable monthly payments, until they wake up one day and realize that their credit card balances are out of control.
Sound familiar? Here are 11 signs to determine if you are carrying too much credit card debt.
1. You’re in denial
Does the thought of being in credit card debt frequently cross your mind, but you tend to push it out of your brain? This may be the first sign that you are in over your head.
You may even find yourself lying to your spouse, family and friends, who may be concerned about your outrageous spending habits with the magic plastic. Or maybe you routinely ignore phone calls in fear that creditors are on the other line wanting to know when you will get caught up on those past-due balances.
2. You don’t know your outstanding balance(s)
Although you’re aware that your credit card debt exists, you don’t feel obligated to check the outstanding balances because you figure this information is irrelevant since you can’t pay them off anyway.
3. You can only afford to make the minimum payment
Known as the minimum payment trap, this behavior is a recipe for disaster as no damage is being done to the outstanding balance; you are simply paying the interest as the balance continues to grow. But this is the sad reality for many because they simply cannot afford to pay anything more than the minimum amount.
4. No wiggle room exists in your budget
Once all the bills are paid each month, you can barely enjoy the little things in life. Enjoying a night out on the town or a even ordering a pizza without using a credit card is not feasible because funds are always extremely low. Even worse, you may resort to credit cards to cover basic necessities, such as gas and groceries, because your bank account is overdrawn or barely hanging in there.
5. You have a hard time saving
It is impossible to save money because the credit card bills quickly absorb any available cash on hand after the household bills are paid. Unfortunately, not having a savings account in place will only make the debt worse because you will not be able to handle financial emergencies without resorting to the magic plastic.
6. Supplementary income is required to pay down debt
To make the minimum payments, you often work overtime or earn money through part-time gigs because your regular income simply isn’t enough.
7. You have maxed out at least one card
Some have maxed out cards in their arsenal because of high interest rates, while others just feel the need to keep spending until the funds run out. Regardless of your unique situation, the balances will more than likely continue to expand beyond the credit limit unless you take action.
8. You can’t stop using your credit cards
Speaking of maxed-out credit cards, is your credit card burning a hole in your pocket? And do you constantly feel the need to make yet another purchase on credit once a debt balance is paid off?
9. You rob Peter to pay Paul
A clear indicator of this sign is juggling payments between creditors because funds are limited. In some instances, cardholders may even take out a cash advance from one credit card to make the monthly payment on another.
10. You do not qualify for new accounts
Maybe you are looking to make another large purchase or you just need another credit card to help you get by until things get better. But the debt-to-available-credit ratio is just way too high, barring you from qualifying for additional accounts.
11. Late payments are the norm
If you are left with no available resources after working overtime, taking on an extra gig, and robbing Peter to pay Paul, the due date may simply pass you by. And the sad part about late payments is that not only do they affect your credit, but it can be rather difficult to get caught up once you are behind.
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