You may not know how much your credit card debt has piled up until you start seeing some signs. If you have several credit cards, tracking your debts may not be easy. Once your credit card debt is out of control, there are some restrictions you will begin to notice. Here are 7 signs that show your credit card debt is out of control;
1. Cards are maxed out | Signs Your Credit Card Debt Is Out of Control
This can happen quickly if you don’t pay your balance every month. Multiple maxed-out credit cards compound the problem. If balances exceed limits, expect the card issuer to raise your interest rate, making it even more difficult to pay down your balance.
2. You can’t afford to pay anything except the minimum payment
Minimum payments are the lowest amount you can pay on your credit card to keep your account in good standing. If you can’t pay more than that and you’re still using your credit cards, your debt is getting worse each month.
3. Your new applications are denied | Signs Your Credit Card Debt Is Out of Control
This is one of the easiest ways to know that something is wrong. Credit card issuers may be able to predict that your credit card debt is out of control even before you do. After a denied credit card application, check your mail for a letter from the credit card issuer explaining why you were denied. If your high credit card balances are one of the reasons, it’s a sign that you need to rein in your spending and start tackling your debt before it gets worse.
4. You’re late or missing payments
Missed payments only make your credit card situation worse. Late payments increase the amount you have to pay to get caught up and lead to late fees added to your balance. If your card is maxed out, those late fees could push your balance over your limit.
5. Your credit score starts dropping
If your total credit card debt is more than about 30 percent of your total available credit, your credit score will take a hit. This ratio accounts for 30 percent of your total credit score. So, if the credit limits for all of your cards combined amount to $5,000, you never want your combined balances to add up to more than $1,500.
6. You’re paying your credit cards with other types of debt
Cash advances, repeated balance transfers, payday loans, or any other form of debt to pay your credit cards simply create more debt by borrowing money to stay afloat.
7. You’re using credit cards for necessities and everyday purchases
Credit cards are a convenient way to pay for groceries, gas, and other daily necessities—and you might even earn rewards points or cash back for doing so. This is great if you’re paying the balance every month. If not, needing credit to pay for everyday expenses is a sign of bigger financial problems.
Eliminate Your Debt
Acknowledging the severity of your debt is an important first step, but you have to take action to address the problem. You have to come up with a workable plan and follow it to the later. Getting rid of debt can take a long time, and results might not be evident at first. Be patient and persistent, and eventually, your efforts will make a difference.
There are multiple ways to tackle your debt, and what’s best for you depends largely on your financial situation and also a little on your own personality.
Check Out 6 Steps To Getting Out Of Debt.