We all live in our own way and style. Sometimes we adopt such means to lead the life that they can result in something bad. For example, we want the luxury house, a luxurious car or want to start a new business but we don’t have money to get those things. In those situations we mostly get our self into troubles and having too much debt is one of them. Are you in too much debt? It can find out by some given methods:
- Your credit cards are maxed out. Credit cards should never be pushed to their limits. You should always keep an adequate amount of money available to them for an emergency if one comes up. Running them up on material things that you can’t afford is a sign that you’re in too much debt.
- You have more than five recurring debts. Having more than three credit cards at any one time can be a sign that you’re in too much debt. Couple that with more than two loans or other revolving credit (for a mortgage, car, student loans, or a computer loan), and you’re just asking for debt troubles.
- You use your credit cards for everyday expenses. If you find yourself using your credit cards to buy groceries or other necessities, because you don’t have enough cash at the time to purchase them, you’re likely in too much debt. Use your credit cards for occasional expenses, not basics like food and utilities.
- You only make the minimum payments on your debts. Being able to make your minimum payments on all of your debts each month does not mean that you’re in control of your debts. Creditors love people that only pay their minimum amounts because it means they’ll make the most interest. The longer it takes you to pay your debts back, the more you have to pay over time.
- You don’t know how much you owe. This is the biggest sign that you’re in too much debt. If you’ve ignored your debt to the point where you don’t even know what you owe, you’re likely in more debt than you think.
If two or more of the warning signs above apply to you, you’re in too much debt. The best thing you can do for yourself is to evaluate your debt and work on a plan of attack for reducing or consolidating it. The longer you wait, the worse your debt will become, so get started on building a brighter, debt-free future for yourself right now.