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Debt is a tough cycle to break and there are all kinds of reasons you can wind up with credit card debt problems so watch for these 5 Warning Signs That You Have Too Much Debt.
You’re laid off for a few months and rely on your credit card to meet all your expenses.
You need emergency car repairs or dental work that insurance won’t cover.
That debt can haunt you even when you’re back to work, straining your budget as you pay more in interest to your creditor.
But when is the problem big enough that you need help?
Check for these signs that you’re struggling with money and need help to solve your debt problems.
If you notice any of these signs creeping into your life, act before the problem gets worse.
With the help of a non-profit credit counselling agency, you can find out how to reduce debt in Ontario and make a plan of action.
When you see how much of your total debt payments are going to interest payments alone, you’ll see how much relief can help.
You Spend Too Much Money on Debt
Calculate all of the monthly payments you spend paying back credit card debt, car loans, lines of credit, student loans, etc.
Then determine what percent of your gross monthly income (before taxes) that takes up.
Not everyone agrees what a healthy amount is.
Some say that, including mortgage payments, spending 43% of your income on debt is the limit.
Still others say that 20% of your after-tax income going to debt, not including mortgage payments or rent, is the upper limit for a healthy financial situation.
Ultimately, if you’re stuck without enough money at the end of the month because of debt obligations, you owe too much.
You Have Physical Symptoms of Stress
Financial stress can manifest itself in physical health symptoms including:
- Sleep problems and headaches
- Heart disease
- High blood pressure
- Anxiety and depression
It can also affect your work performance, making your situation feel even more precarious than it already is.
You Have No Savings
When your bank account is empty, you’re especially vulnerable to falling back into debt and erasing your progress.
Anything can set you back, from a surprise expense to missing a shift at work.
It can leave you reaching for your credit card and undoing any progress you’ve made just to make ends meet.
You’re Making Late Payments
A late payment can cost you more in fees or penalties, and it will damage your credit score.
If you know that you’re not going to have enough to pay every bill, call your creditors ahead of time, or speak with a certified Counsellor from a non-profit credit counselling agency to get ahead of the problem.
You’re Getting Collection Calls
Calls from debt collectors are a big warning sign that you need help solving debt problems.
Once you start getting calls from creditors, it’s a sign that you haven’t been able to keep up, and things could get worse in the form of wage garnishments or other legal actions.
As a last resort investigate personal bankruptcy to get relief from these 5 Warning Signs That You Have Too Much Debt.