Four Danger Signs of Debt

Acquiring unexpected debt can cause stress, worry and anxiety. Sometimes, past due bills include late fees, and before you know it, you are struggling just to make ends meet. Taking hold of the situation before it gets to serious can save you from future financial troubles and prevent your credit score from dropping. By paying attention to your spending habits and analyzing your bills, you can look for dangerous signs of debt and prevent your financial situation from getting worse.

Using One Credit Card to Pay Another

When credit card bills become overwhelming, it can be tempting to use one card to pay the balance on another. Doing so, however, creates a situation where you are living off credit cards and accumulating debt on a permanent basis, even though you feel like you are making payments. If you are using one credit card to pay the balance on another, it is time to evaluate your spending habits and compare to your income. Confronting the problem is the first step toward solving it.

Hiding Purchases

Hiding purchases or lying about spending to your spouse is a serious sign that your finances are in trouble. Generally speaking, people do not feel the need to hide purchases if they think they are justified in spending money. When you buy something you know you can't afford, guilt sets in, and you feel the need to cover your tracks. More importantly, hiding purchases from your spouse signifies potential problems with controlling your spending.

Making Mininum Monthly Payments

Making minimum payments on a credit card bill once or twice is not a big deal. Making minimum payments on a regular basis could be a sign of a serious debt problem. Repeatedly sending in the smallest amount required per month, not only increases interest owed, but encourages you to keep spending above your means. While making minimum monthly payments could keep creditors off your back, it doesn't help you get out of debt.

Maxing Out Credit Cards

Like paying only the monthly minimum, regularly maxing out your credit cards can be a danger sign of debt. Reaching your credit card limit on a monthly basis means that you are spending to the maximum regardless of what you make, and you could be creating a situation that could be tough to get out of in the future. If you have a tendency to max out more than one credit card on a regular basis, it is probably time to analyze your finances.