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Recognizing a Credit Card Debt Problem

Written by:
Financial Literacy Specialist

Deciding enough is enough when it comes to out-of-control debt.

When it comes to your peace of mind and well-being, there really is no living with too much credit card debt. Credit card debt problems can cause you sleepless nights, daily stress, and unnecessary arguments in your household. Most people want to believe that if they just work hard enough they can beat their credit card debt problems on their own, but how do you know when it’s finally time to seek help?

You don’t have to live with credit card debt – there are options that can help you find relief! Call (844) 276-1544 to let a certified credit counselor assess your debt and provide you with options for debt relief. 

How much debt is too much debt?

One question people often have with credit card debt is how to know when you have too much debt and need to seek debt help. There is no set dollar amount you can use to measure if you have too much credit card debt – depending on your situation and income, what’s manageable for one person may be a problem for another.

While there is no set dollar amount, often a good measure of your debt is your debt-to-income ratio. This compares how much debt you owe versus the take-home pay you bring in. If you’re spending the majority of your income each month to pay you debts, you’re probably not leaving enough for food, transportation, utilities and other bills, and everything else you need to live. If this is the case, even if you’re just managing to stay afloat and break even, it may be time to seek help to find relief from your debt.

What’s the risk in waiting to find debt relief?

When you’re having trouble with your finances it almost just seems easier to ignore the problem until your situation improves. Credit card debt just isn’t one of those problems you can put off until later, though, as waiting may only make the problem worse. In many cases, leaving your credit card debt alone simply gives it more time to get even further out of control.

Credit cards often carry high interest rates, so your balance is being constantly increased as interest gets added. If you have high account balances, even if you pay the minimum amount due each month those payments may only be covering the interest accrued. You never actually pay anything towards the original debt (also called the principal), so interest just continues to build and you never get anywhere.

Sometimes paying the minimum may not even keep your balance in the same place. In some cases your interest rate and balance on a particular credit card may both be high enough that your minimum payment isn’t even helping you break even with your debt. Even though you pay the minimum amounts due on time your balance continues to go up little by little each month.

Can you handle your debt problems on your own?

There are a number of strategies available if you just need to reduce your debt to make it more manageable each month. If techniques like better budgeting and negotiating interest rates won’t help then you may need to seek more aggressive measures, such as debt consolidation. There are do-it-yourself debt consolidation options you can take, but you need to make sure you have all the facts and are choosing the right debt relief option for your financial situation. Choosing the wrong relief option can even put you in an even worse financial situation.

If you have questions about your debt, want to know if you need debt relief, or are wondering which debt relief option will work best for your finances, call to speak with a certified credit counselor at (844) 276-1544.

Get a free debt and budget evaluation to find the right way to deal with debt problems.