Signs That You Are Headed for Credit Trouble

Using credit for basic needs

Everyday necessities like food, transportation, and clothing should be paid for using your income. If you have to use your credit card to pay for these expenses that you should be paying with cash, then it’s a clear sign that you are falling short on your finances.

Skipping one bill to pay for another

While prioritizing your credit card bills is always necessary, skipping one is not. If you always feel the need to skip one bill in order to pay for another one, then your debts are already starting to get out of hand.

Transferring balances

Transferring balances should only be considered if it means consolidating your debts into a lower, more affordable loan. However, if you are transferring balances just to avoid credit card payments, you are surely headed into a big financial trouble.

Charging more than what you pay

Just imagine filling up a huge basin of water while someone throws out more water than what you put in. The same principle works during debt payment. If you charge more than what you can allot towards repayment, you will never get out of debt.

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Avoiding credit card statements

Unfortunately, avoiding your credit card bills doesn\’t make your debts go away. Hiding away from your problem only makes it worse, but if you accept and face your debts sooner, you can start working your way out of it.

Not having a plan to pay off your debts

Some people who become overwhelmed with their bills decide to just let them be and not have a plan at all. However, this could only lead to problems in the future, when the time comes that you need to rebuild your credit and you’d end up paying for a huge pile of debt that shouldn\’t been there in the first place. No matter how big or small your debt is, always make a plan for payment, and of course, with a plan comes action.

Having past due accounts

Having past due accounts only mean that you\’ve been through some sort of financial crisis that is keeping you from making on time payments. Unfortunately for you, once they become past due, it also becomes harder to get them back on track.

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Not having an emergency fund

Most of the time, not having a rainy day fund is what pushes people to use credit card in urgent situations. If you have nothing to cover for unexpected expenses that come along the way, you’re surely in for credit card trouble. Unfortunately, building up your emergency fund can be a big challenge if debt has started.

Having maxed-out credit cards

Unfortunately, having maxed-out credit cards is not merely a sign that you’re headed for debt trouble, but rather, it states that you’re already in it. As overwhelming as it may seem, you should start working out on some ways to reduce your outstanding debt and to avoid having the same problem in the future.

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