5 Signs That Your Debt Is Out of Control

Published:

Debt is a heavy burden. Not only can it weigh down your finances, but it can also impact your relationships and plans for the future. However, you don’t need to let it take over your life.

You don’t need to live in fear of your finances. However, you are the architect of your own future. You have to be willing to assess your situation and take the necessary steps to regain control and financial independence.

If you are showing any of these five signs that your debt is out of control, you must start taking action.

1. You Rely on Credit Cards for Everything

Financial owe, hand of asian woman sitting, holding credit card, stressed by calculate expense from invoice or bill, no money to pay, mortgage or loan. Debt, bankruptcy or bankrupt.
Image Credit: Kmpzzz/Shutterstock.

 

Credit cards can be very useful financial tools. They can help you establish a credit history, consolidate payments with balance transfers, and offer several types of rewards. However, they can also cause irreparable damage if you don’t understand how credit works.

As a general rule, you shouldn’t use them to pay for all your monthly expenses unless you are able to pay off the balance every month. Since they carry the highest interest rates, credit cards can keep you in debt for decades. So, if you carry balances, you should review your budget and ensure that you live below your means. Eliminating unnecessary spending will help you maintain a lifestyle that is compatible with your financial goals.

2. Your Cards Are Maxed Out

man with credit card.
Image Credit: belchonock/DepositPhotos.

Credit cards can also be helpful when financing large purchases. But if your cards are maxed out every month, it’s a red flag that you have a serious problem. In addition to hurting your credit score, it causes you to accrue thousands of additional debt.

This is often a result of habitual overspending, and it will quickly spiral out of control if you ignore the problem. However, counselors and debt relief agencies can help you make a plan.

3. Your Debt Is Half of Your Income

Sad depressed man checking bills, anxiety about debt or bankruptcy, financial problem, bank debt or lack of money, unhappy frustrated young male sitting at work desk with laptop and calculator.
Image Credit: fizkes/Shutterstock.

The debt-to-income ratio is an important statistic for creditors. It provides a tangible way to evaluate your risk level and helps determine the terms of loans. Lenders typically look for a debt-to-income ratio under 36%. Although, the lower, the better.

If your debt is more than half your income, it leaves little flexibility in your budget. Not only is it harder to save for the future and invest, but it also means you are more likely to default on payments when you have unexpected expenses. For those who are at this threshold, it’s time to take immediate action to reduce your DTI ratio.

4. Lenders Deny Your Applications

Serious old senior mature 60s man stretch out palm to camera says stop gesture indoors. Social problems older generation disrespect ban refusal disagreement. Aged businessman trouble denial rejection.
Image Credit: MAYA LAB/Shutterstock.

Lenders deny applications for a variety of reasons, including excessive debt. But if you are consistently denied, you must understand why and start addressing the issues. There may be steps you can take to improve your credit history and your chances to obtain funding. Take a deeper dive into your history and ask yourself:

    • Is everything in your credit report accurate?
    • Can you have something removed?
    • Is it possible to work with the creditor to get it off your credit report?

It can be overwhelming if you don’t know where to start. But, seeking expert advice can help you regain control of your debt and your finances.

5. You Are Avoiding Calls From Creditors and Debt Collectors.

man wearing glasses massaging the bridge of his nose.
Image Credit: ALPA PROD/Shutterstock.

When you are unable to afford your monthly expenses, you may have to choose which bills you pay. However, if you miss enough payments, you should expect lenders to start contacting you. They will try to collect it or turn it over to a collection agency to do it for them. Unfortunately, avoiding the calls could lead to bigger problems, including legal action.

The good news is that many creditors are willing to work with you if you notify them of your circumstances. They can set up installments, work out a repayment plan, or negotiate a lump-sum settlement if you explain your situation.

15 Items That Used to Be Cheap but That Are Now Shockingly Expensive

Portrait of beautiful woman outdoors. Attractive lady smiling and looking into camera.
Image Credit: New Africa/Shutterstock.

It’s no secret that the cost of living continues to rise. While some items have remained affordable, others have seen significant price hikes that might shock you.

From everyday essentials to guilty pleasures, here are 15 items that have become shockingly expensive.

15 Items That Used to Be Cheap but That Are Now Shockingly Expensive

I’m Frugal: Here Are My Top 30 Frugal Living Tips to Save Money

Funny child hugs the radiator. Kid in hat and warm clothes enjoying home heater. Heating of housing during the energy crisis in the winter cold season. Restrictions and savings of gas and electricity.
Image credit: Sharomka/Shutterstock.

 

I’m super frugal, and one of my passions is sharing my frugal living tips with everyone.

Here are some of my absolute favorite frugal tips to help you get started on your journey to frugal living.

I’m Frugal: Here Are My Top 30 Frugal Living Tips to Save Money

15 Things That Are No Longer Worth It Because of How Expensive They Have Become

Portrait of beautiful young blonde woman posing and giving a kiss to the camera.
Image Credit: PKpix/Shutterstock.

 

Everything comes with a hefty price tag these days. From indulgences to essentials, the cost of living keeps rising. We used to consider certain items affordable options, but now they’ve become so expensive that they’re no longer worth it. Here are 15 things that have lost their affordability and make us wonder if they are worth it!

15 Things That Are No Longer Worth It Because of How Expensive They Have Become

28 Practical Ways Frugal People Save Lots of Money

Young pretty woman traveller in baseball cap looks and smiles at camera at green nature forest background, portrait close up.
Image Credit: DedMityay/Shutterstock.

 

Saving money doesn’t have to mean saying goodbye to life’s little indulgences. With a few smart tweaks, you can stash away cash for that dream vacation, rainy day fund, or splurge-worthy purchase without feeling like you’re on a constant budget patrol.

Think of it as a side hustle that pays off without the extra hours. Whether you’re looking to conquer debt or simply boost your bank account, these tips are guaranteed to put more money in your pocket, painlessly.

28 Practical Ways Frugal People Save Lots of Money

14 Ridiculously Random Tips That Could Save You Lots Money

Photo of thought elder white hair man work laptop hand face sit wear spectacles yellow shirt at home alone.
Image Credit: Roman Samborskyi/Shutterstock,.

 

Want to save some money? There are so many ways to save money that are published in articles all day, every day.

It can be tiring to sort through them and find the ones that work for you, so we decided to scour the internet and find some of the best ones to share with you. But we couldn’t decide which ones to share with you, so we just decided to share the ones we liked, which means that these are pretty random!

14 Ridiculously Random Tips That Could Save You Lots Money

 

 

 

Leave a Comment