Credit trouble isn’t always obvious. Warning signs often go unnoticed until after it’s too late. Taking an honest look at your finances and spending behavior can reveal problems and allow you to adjust before you’re in too deep. Be aware of these credit trouble warning signs so you won’t need debt relief options down the road.
Change Habits Before It’s Too Late
If your spending is getting out of hand or it’s a struggle to make on-time payments, making drastic changes can save you from more significant financial problems. The key is to see dangerous trends before they become real trouble.
Warning Signs to Watch For:
- Debt is creating tension in the household: If the amount of debt your household carries is dominating the conversation, you may be heading towards debt that you are unable to handle on your own. This can lead to a situation where it’s difficult to get out of debt.
- Relying heavily on credit: Most credit advisors agree that a credit usage ratio as high as 35% is still a healthy amount. However, relying largely on credit to cover your regular expenses can get out of hand in a hurry. Plus, maxing out a card will result in increased interest and can lead to insurmountable debt.
- Multiple past due notifications: Receiving past due notifications from your lenders is an obvious sign that there are problems to fix. Past due notifications can lead to higher interest rates, debilitating late fees, and other costly penalties.
- Relying on balance transfers: Transferring balances from one credit card company to another can reduce interest charges. However, it is a sign that making payments has become difficult. Changes are needed before managing credit card debt becomes too complicated.
- Making minimum payments for multiple months: Sometimes it makes sense to just pay the minimum on a card to make room for unexpected costs. Paying the minimum for months at a time suggests trouble. Interest charges keep you in debt for too long if you’re only paying the minimum.
- Considering cash advances or payday loans: Cash advances are predatory loan products that put you in a never-ending cycle of debt. If these harmful options are on your radar, your debt is on the verge of overwhelming you. It’s not too late, but you should consider researching debt consolidation options.
If any of these warning signs are a regular part of your financial routine, it’s time to change your ways. Cutting back spending and reducing expenses wherever possible is a great start. Use a budgeting worksheet to learn how funds can be re-allocated to cover costs as efficiently as possible.
Be on the lookout for these warning signs and adjust if necessary. Changing repeated financial behaviors is hard, but it’s the best way to protect yourself from added stress that can come from too much debt.
If you’re struggling with debts, contact American Consumer Credit Counseling today. Call 800-769-3571 for a free credit counseling session.