While not everyone has their own credit card, those that do usually have credit card debt, regardless of their income. This is because many of us have come to rely so much on credit cards even if we have cash. The problem here is that some people are unaware that they’re already in serious credit card debt and they don’t know it yet. Here are the signs to watch out for:
Sign #1: Collectors call you regularly
People get calls from collectors when one of their credit cards is in pretty serious debt. However, if you’ve called more regularly than the average Joe, like perhaps several times a day for just as many credit cards, then it’s most probably a sign that your debt is spiralling out of control.
Sign #2: You keep getting new credit cards
There are actually people who get new credit cards to pay their existing debt, which in turn gets them into even more debt. Yes, this juggling act may keep your creditors at bay for a short while, but you’ll eventually have to face the music and actually start paying your obligations if you want to get out of debt during your lifetime.
Sign #3: Regularly missed payments
An occasional missed payment can happen to anyone. It could’ve been an honest mistake or perhaps an emergency occurred, preventing you from paying your credit card on time. Regularly missing your payments, however, means you’re either doing it on purpose (which is unlikely) or don’t have enough money to pay, which could indicate that your debt has gotten too large and unwieldy to settle.
Sign #4: The debt is increasingly getting bigger
If you pay only the monthly minimum in your massive credit card debt, it’s bound to get bigger thanks to the growing interest. So even if you’ve stopped getting new cards and using them, you still need to find a way to pay more than the minimum so that you can actually work towards reducing the debt. And that’s just for one financial obligation; if you have a seriously large total debt, then you probably have to deal with several large credit card bills.
Sign #5: You use cards to pay for everything
Credit cards may be safer to use than debit cards, but this doesn’t mean you should use your plastic to pay for all your daily expenses, including your mortgage payments, taxes, medical bills, lottery tickets, or even your child’s college tuition. Sound familiar? If you do this regularly, you’re either on the brink of a financial cataclysm or are already in one. If you’re using your credit card because you don’t have enough money, then you have to take a good look at your income and budget, and make the necessary adjustments.
Sign #6: You don’t know the size of your debt
Do you know how much you owe your creditor? It doesn’t have to be exact to the last cent, but you need to have a rough estimate. Why? Because it’s the first step in acknowledging that your debt is out of control. Besides, you can’t make repayment plans if you don’t know the size of your debt.
Sign #7: The default rate kicks in
The default rate refers to your credit card’s other interest rate, which kicks in when you miss a payment, or pay less than the minimum before the due date. You know you’re in trouble when this happens. Sadly, if you don’t make more than the minimum payment, it’s going to get only worse.