Finance

Signs You’re Carrying Too Much Credit Card Debt

Credit cards can be beneficial if used correctly.

Feb 26, 2014

Credit cards can be beneficial if used correctly. They can help protect you from fraud when shopping online, provide great rewards and offer convenience at check-outs. However, when they begin to negatively impact your personal finances, it may be time to take a step back, especially when your balances get out of control. The following are four signs that you are carrying too much credit card debt.

1. It's a Struggle to Make Ends Meet

If you pay high credit card bills, it can become harder to meet your essential expenses, such as rent or mortgage and utilities. This can be a good sign that you’re carrying too much debt, according to Kiplinger. If the majority of your debt is on one high-interest credit card, you may want to consider applying for a lower-interest card and transferring your balance to it. Completing this process could help you move some or all your debt to a card with zero interest, potentially saving you money.

2. Minimum Payments are All You Can Afford

The credit card issuer makes money through the interest you accumulate. If you can only afford minimum payments, chances are you carry too much debt.

3. Paying Bills Late is Your Only Option

One of the cardinal sins of being a credit card user is making late payments. Not only are you allowing your balance to accrue interest, but you may also incur late fees and rate hikes. Paying late is one of the most common signs that you have a debt problem, because when it becomes too much to handle, it can be difficult to keep up, according to Money Talks News. You may also begin to forget when your due dates are because you have so many different accounts to pay each month.  Missed payments damage your credit score, and prolonging payments will also prolong your credit score’s recovery.

4. It's Difficult to Secure New Credit

No matter how good your credit score is, lenders may decline you for a loan if you are carrying too much debt. Therefore, if you know that you score is in good shape, but you were denied an auto loan, you may have too much debt. This is especially true if your debt-to-income ratio is high, as this is a red flag to creditors that you won’t have enough money to pay off any new debt. For credit card debt, a balance transfer may help, while those with a lot of mortgage or student loan debt might want to consider a refinance.

These signs all point toward unwise use of credit cards. Zions Bank’s Eliminate Needless Debt (END) Program has been helping individuals and families pull back the reins on their spending habits. If you need help getting out of credit card debt, check out Financial Peace University.
 

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