While there are quite a few debt calculators out there that will use your information to determine whether you fall under the definition of having too much debt, there remains the general rule of thumb that if your debt payments (including your mortgage, car payments, credit card payments, and other loans.) exceed more than 20% to 33% of your income, then you are too far in debt.
Here are a few quick warning signs that may indicate you have too much credit card debt. All you need to do is take a quick glance at your current debt situation.
#1: You only pay the minimum required on your credit card payments
If you can only afford to pay the minimum every month on your credit cards, chances are that you have too much debt and are having trouble keeping up with the interest that continues to pile up.
#2: You have little to no savings
If your savings account is almost empty or completely empty, with no emergency funds, then you are likely pretty far down the rabbit hole of too much credit card debt. Similarly, if you are having trouble saving up funds to create a little safety bubble in your bank account because all your revenue is going towards necessities or debt payments, you are too far in debt.
#3: You are using credit cards to pay off other credit card debts
If you are in the habit of getting a new credit card to transfer your other balances to get lower rates or lower payments, you are digging yourself a deeper hole of debt that will eventually bury you alive. Additionally, if you are juggling payments and consistently have to stall one credit card company in order to pay off the other, you should look into debt relief.
#4: Late payments are common
If you consistently turn in late payments because you are living paycheck to paycheck, you are likely too far in debt and will probably have difficulty getting caught up again without assistance.
#5: Your card is getting denied or you are failing credit check
If your credit card gets denied because you exceeded the limit, or you are failing a credit check due to the amount of debt and late payments negatively affecting your credit, you are too far in debt. This credit failure could prevent you from taking out future loans, renting an apartment or house, or even getting another credit card.
What should you do?
If you are experiencing some or all of these warning signs, you should look into debt relief relatively soon and seek advice on how to pull yourself out from under your increasing credit card debt, before it becomes even more of a challenge.
Bill Rumping is the Debt Expert of Mid America Debt Relief. If you or someone else you know has an outstanding amount of credit card debt contact Bill at (636) 223-5900 or bill@MidAmericaDebtRelief.com.