Managing Debt

Many of us know what it is like to be in debt and are lucky enough to either avoid it or not to be in it for very long. There are those people who do not recognize this problem or do not see that they are slipping into debt. After all some people these days are more worried about gaining and keeping their credit more then anything else.

Now credit is great when it’s used wisely, but more and more Americans are getting in over their heads and threatening their financial futures because of it. Just because you can pay your minimum payments each month doesn’t mean you don’t have a credit problem.

Remember, low minimum payments benefit the credit card company, not you. They are the means by which many people become enslaved to their debt, taking decades to pay off purchases whose prices have become grossly inflated by interest charges that have accumulated for years. This is how credit card companies make their money.

Don’t allow yourself to fall into a false sense of security that you have your debt under control just because you’re not late on any payments and you can manage the monthly minimums. There are a few signs that will help you to recognize if you have a debt problem or not.

1. You don’t have any savings. - It is always important to tuck away some money each month. You never know when you might need it somewhere down the road for emergencies.

2. You make minimum payments on your credit cards. - As we said before this doesn’t help you pay through it any faster, but keeps you cycling through the bill each month.

3. You use credit cards for things you used to buy with cash, such as groceries. - Use your credit cards sparingly. If you aren’t careful things will add up and you’ll be using it for everything.

4. You have more than two or three major credit cards.  - If you are using the excuse that you need to build up credit then stick with just one, it’s all you need.

5. After you pay your credit card bill, you increase your balance by the same amount (or more) the following month. - Don’t give yourself room to purchase more and spend more. It only means that you are getting to used to it.

6. You’re at or near your credit limit on your credit cards. - Try not to put this kind of pressure on yourself. Sometimes credit cards can be used for emergencies, but not if you don’t have anything on them.

7. You count on the float in order to pay your bills, writing a check hoping that you’ll be able to cover it by the time it clears your bank. - This is never a good thing to do, but sometimes it is a must. This is one of the most obvious signs that you are in debt.

8. You’re unsure of the total amount you owe on all your debts. - Obviously this means that you have more then you need.

9. You’ve been denied credit.

10. You get calls from collectors. - Don’t let yourself get to this point. It only causes hassle and problems for you.

11. You lie to your spouse or other family member about your spending or hide credit card statements from family members. - If you’re ashamed then you need to fix it and quickly.

If you can relate to any of these then you need to know that the sooner you act, the easier it will be to get out from under the burden of debt. Beware of companies that promise to fix your credit or debt consolidation companies. There’s no easy fix, but it is possible to turn your finances around if you work at it. If you’re motivated to get started and can find the right way to do it, then start right away and get back to a comfortable and carefree lifestyle.