Credit cards understandably come with a wealth of benefits, almost acting as a financial safety net at times when unexpected payments pop up. However, it can be all too easy to become complacent about repaying outstanding balances and that’s when debt can start to wrack up. Knowing the warning signs to look out for can help stop you from falling into an unmanageable billing cycle and save you from the stress of dealing with financial insecurity.
Not paying credit cards in full: Only making the minimum payments each month will mean that you will accrue interest charges on the balance you carry over each month. This interest can make managing monthly payments much more difficult.
Reaching your credit limit: Is your credit card nearing its maximum limit? Reaching the credit limit on one or more of your credit cards is a sign that your debt may be out of hand.
Paying one credit card with another: Using a balance transfer from one credit card to clear another is a slippery slope and can be one of the clearest signs that your credit card debt has become unmanageable.
Unsure of interest rates: Understanding the interest rates on all credit cards is vital if you are to manage regular payments and clear the debt you owe.
Using advanced payments: Another sign you could be struggling with credit card debt is if you’re using advanced payment cheques often offered with a range of credit cards.
The budget doesn’t stretch: If you find yourself regularly using your credit card to manage day-to-day finances it could be a sign that you’re living beyond your means each month and need to reconsider your entire financial situation.
You’re missing payments: The minute you miss a payment on your credit card or other debt is a sign that you’re struggling with debt and when you can’t handle the amount of money you owe. Missing a payment can affect your credit score and will appear on your credit report.