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By Clark K. — Published May 24, 2018
Credit cards and loans help us to get the things we need without actually having the money for them at that moment. And while they have proven to be extremely useful some amount of diligence is required to make sure that we are not overspending. Loans and credit cards bills have to be paid back and often with interest. If we are not careful we might find ourselves struggling to clear the debt we’ve put ourselves in.
Taking stock of your debts and finances on a regular basis is a good habit to maintain. When you know your overall earnings versus your overall debt you can form a clear plan on how to pay back our debt. However, in some cases you might find that your payments are much higher than your income and paying off your debt is going to be difficult. To make sure that you don’t put yourself in that position here are ten warning signs to look out for to know that it’s time to stop spending and take positive action.
Warning signs that you have too much debt
Savings: Or rather the lack of savings. When you consistently find yourself with little to no bank balance at the end of each month you need to start being careful.
Credit card payments: If you are not paying your full bill and only paying the minimum amount you are steadily accumulating debt.
Purchases: If you are heavily dependent on your credit card to make purchases even when you haven’t paid your full bill, you need to check your spending.
Over the limit: Do you have one or more credit card that is maxed out or over the limit? This is a warning sign of too much debt.
Late payments: If it has become a habit for you to pay your bill after the due date then you could be in serious debt.
Debt awareness: You need to know how much debt you have to be able to clear it. If you find yourself avoiding finding out, you might have more than you can handle.
Cash advances: If you find yourself using your credit card for cash advances to pay off other bills you are putting yourself in even more debt. You might want to keep in mind that interest rates on cash advances can be very high.
Bad checks: If your checks are bouncing and your bank account is over drawn that is a sure sign of debt. If this happens often it’s time for you to sit up and take notice.
Credit denied: Has an application for a loan or credit card that you put in been denied? If so then you could have accumulated a lot of debt and your credit ratings have dropped.
Hiding from the truth: When you talk to others or even think about your financial situation if you find yourself in denial about your debt, it might just be out of control. Lying to family and friends and even yourself about the amount of debt you are in is one way of knowing that it is too much.
Be very cautious if you find yourself identifying with any of these warning signs. Do not ignore any of them and start to take action. Get clear on your financial situation and then make a concrete plan on how to overcome your debt.
One of the simplest solutions is to cut down on your spending till you have managed to save some money. Confiding in a family member or friend who will be able to give you the right guidance is also something you could consider. Financial debt can be crippling so do your best to get out of it at the earliest.