Following are questions that will help determine if you may be in danger of future debt problems:
Do you have savings? Do you find yourself exhausting savings as a way of supporting your debts?
If you do not have savings, you should be concerned because you may not be able to adjust to an unexpected situation that requires additional finance resources. If you are exhausting savings to keep up with your bills, it may be an indication that you are spending more than your income can support.
Do you pay only minimum payments on your credit cards?
If you are only making minimum payments and can afford to pay more, do so. If you can only afford minimum payments or not much more than minimum payments, you are probably overextended and should analyze your budget to adjust your spending behavior. It is likely that if you are thrown into a situation that requires more financial resources, your situation will become unmanageable.
Have you been declined credit or declined a credit line increase?
Being declined for credit is a good sign that you need to evaluate your finances. Creditors use guidelines to determine your credit worthiness and if you are declined, your finances are exhibiting signs of trouble.
After you pay your monthly credit card bills, do you accumulate as much or more debt the following month?
If so, this may be a sign that you are dependent on your credit cards to maintain your style of living or supplement day to day living expenses.
Can you account for the total amount of debt that you owe? Do you avoid adding up the total of your outstanding debt?
If you cannot account for the total amount of debt that you owe, you may be avoiding the problem. You must confront your spending behavior. Stop avoiding paying on your debt and establish a better repayment plan before the situation becomes unmanageable.
Are your cards nearing or over your available credit limit? Have you ever attempted to make a credit card purchase and had the card declined?
If the answer is yes, it may be another sign that you are not confronting the pain of paying for credit card purchases. It is also a sign that had you been more aware of your finances and understood how high your balances were, the situation could have been avoided. Your creditors assign a credit limit to you based on your credit history, outstanding indebtedness, and income. If you are at or near your limit, it is a good sign that you are headed for financial trouble.
Are you dependent on cash advances to pay on your other credit obligations?
You have entered a danger zone. Your income can obviously not support your lifestyle and it is time to analyze your budget and make adjustments. You may need to seek outside help for guidance.
Do you purposely hide credit card bills from family members?
Hiding debt from family members is an indication that you realize that there is a problem. The fact that you feel you have to hide your spending behavior from loved ones indicates that you refuse to confront the situation, but realize there is a problem.
Do you float checks or bounce checks?
Floating checks is the practice of issuing a check in the hope that by time the check is cashed, you will have the money in the account. Floating and/or bouncing checks is an indication that you are living paycheck to paycheck and your finances are in trouble. Floating and bouncing checks indicate that you are not fully aware of your financial situation.
Do you get collection calls from creditors?
Collection calls are a sure sign that you are behind on credit obligations. Don’t avoid the problem. Start planning to become current again.