Signs you have too much Debt

Once debt becomes out of control there are obvious signs. When your new best friend is the debt collector on the end of the phone or you hide behind the sofa when the rent man calls, alarm bells should ring. When you decide that candle light is more attractive than paying for electricity, it is a sure sign that you are out of your depth. When the not so friendly loan shark has broken your legs or the bailiffs are at the door, it is way too late to realize that it would have been better to have spotted the signs that you had too much debt before it became a way of life, and failed to act on them.

The first sign that you have too much debt is when you discover that you are living beyond your means. This can occur when there is no emergency fund in place to enable you to cope with unexpected expenses. If it becomes a necessity to use a credit card cash advance attracting exorbitant interest, or a payday loan, it should be immediately apparent that spending should be curtailed and income directed into savings.

When you find that you can only afford to meet the minimum payments on credit cards, this should be a wake up call to put the brakes on expenditure and examine your current finances in depth. Find ways to increase income by renting a room in your home, taking a part time job, or through other viable means.  

Often money can be saved by assessing financial expenses which have simply become habit. Now is the time to consider seeking out a low interest rate balance transfer card, changing insurance provides, comparison shopping to see if a better checking account is available, and comparing costs between utility providers. Complacency with current arrangement can be costing far more than you realize.

Another sign that you have too much debt is when the ATM refuses to give you any cash but instead swallows your card. Running up an overdraft, incurring late payment charges, and using credit cards for day to day expenses from necessity as opposed to prudently acquiring cash backs, are all danger signs.

Applying for more credit cards, loans, or seeking to release equity from the home to raise further funds, are all signs that debt is not only a problem but is being mismanaged. It is never advisable to attempt to borrow your way out of debt, nor jeopardize personal relationships by asking friends or family to co-sign a loan or lend you money.

If a debt problem is not tackled at once the trend may become irreversible. Figures released by the CCS on client debtors revealed that 30 percent of 300,000 debtors at the time were beyond help. Don’t wait until bankruptcy looms to listen to the warning signs and take control of the debt.