Do you have too much debt? Here are a few warning signs.
- You have maxed-out your credit cards
- You only pay the minimum monthly credit card payments
- You are getting calls from collection agencies about your credit accounts
- You don’t have savings
- You have been denied credit when you apply for a loan
- You have two or more credit cards
- You borrow from one credit card to pay another
- Your checks bounce
- You’re hiding your billing statement from your spouse
- You have taken at least once cash advance
- You have a problem remembering how much you owe
Debt isn’t all bad. It helps when we purchase a house through a bank loan. It helps when we need additional capital for a business. Most of you might debate me on this. In fact, I know most beliefs will clash with mine. For some, it may be tenaciously etched due to past experiences and stories heard from closely friends or relatives.
Whenever there is a debt problem, I believe that debt has been misused in most of these cases. Credit cards have almost always been the culprit in these messes.
Unfortunately, a lot of us are not capable of handling debt. We misuse it to buy unnecessary items. With a big spending limit and an attractive rewards program, you will doubtlessly be lead you to debt problem.
Here are a few circumstances that may snag you into debt.
Poor Money Management - Many young people have never been educated at managing money. They hardly understand how. Credit card and lending companies exploit that. In fact, there are people employed by these companies to think of new ways to boost spending.
Unfortunately for credit card users like us, these new ways work. People end up purchasing more and more, spending more than what is earned. It ends up in overdue charges and interest payments.
Unexpected Occurrences - Some things that happen unexpectedly may bring us into debt problems. This may be in the form of medical expenses, job loss or a death of a family member.
Impulse Buying - Greed and addiction maybe fingered in these cases. A lot of people may want things just for the sake of having it. Some people get addicted to gambling, alcohol and many other vices.
I have written a blog post regarding impulsive spending a month back.
Borrowing money is a double edged sword. You may be victorious in the end if you use it responsibly but it may cut you if you’re careless. Debt is a financial tool and I will use it as tool to get to attain my financial goals.
I am eager to hear your comments.