Most Americans have one form of debt or another. Credit cards, loans, mortgages, they can all add up. We want the nice things, from brand new cars to wearing nice clothes. We even enjoy going out with friends and family. What happens if we cannot afford these things on our own? We take out debt to pay for it.
Eventually, it can become too much for us. Do you know when is the right time to stop pulling out the plastic? It can take some honesty and discipline to realize you might have gotten over your head. Take a look at these 5 ways you can realize you have too much debt.
1) You Can Only Afford the Minimum Debt Payment
If you use credit cards or a loan, you are expected to make monthly payments. These are the minimum payments. The thing is, you’re not meant to max out your credit cards every month. This is especially true if you want to build your credit. You make a few smaller purchases and pay the debt in full. That way you avoid expensive interest tacked on. Maxing out your cards and paying a little at a time will only hurt you in the long run. Why have credit cards if you’re going to pay so much more money to have them?
2) You Keep Getting Denied
Let’s face it, you’ve become a risk. At one point, you were able to get credit cards and loans. Now, no one will touch you. That’s because you’ve taken out a lot of debt and aren’t trying to pay it back. One big thing lenders look at is your credit utilization rate. This is the ratio between the debt you have to the amount of credit you can use.
3) You Worry A Lot About Your Debt
This is one big sign you’re in over your head. When you’re laying awake at night, worried about your debt, it’s become a problem. You shouldn’t be losing sleep over whether you’ll be able to make your payments. Also, are you fighting more about money with your spouse? This is another big sign that you’re in deep.
4) You’re Not Being Honest About How Much You Owe
Let’s face it, you’re ashamed of how much debt you have. That can translate into you not being honest about how much you have. Many people lie to people they’re dating, friends, family members, and more. Yes, it’s probably not their business, but consider that lie as a sign that you’re not doing as well as you’re saying you are. It might be time to fix it.
5) The Offers Stop Coming in the Mail
When you’re in good standing, the offers will come routinely in the mail. If they stop coming, then you’re not really eligible anymore. Simply put, they don’t want you to be a customer any longer. That should be a wakeup call that it’s time to get your debt and finances in order.
