Top 7 Credit Card Warning Signs Of Debt Trouble

by Hank Coleman

Credit Card Warning Signs Of Debt TroubleDo you have a problem with your credit card debt? Do you know the credit card warning signs that your debt may be out of control or hard for you to handle? Fill out a quick form and start on the road to financial freedom.

Warning Signs Of Too Much Credit Card Debt

I think that if you are truly honest with yourself that you probably know these seven credit card warning signs that you may be in debt trouble. Here are the credit card warning signs to look for…

Paying Off One Credit Card With Another

One of the easiest signs that you most likely have too much credit card debt is that you are using one credit card to pay off the balance of another. Have you ever used those balance transfer checks to payoff another credit card?

This may be a good strategy if you have an overarching plan to specifically attack your debt. But, it can also be a warning sign that you may have too much debt and cannot handle the payments.

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It is a slippery slope that you are tackling by moving debt around from one account to another. And, as the last statement described, it is also simply moving debt around. It is not tackling the underlying problem of your spending habits that are creating the debt.

Using Advance Payments

Another warning sign that you may have too much debt and could possibly have trouble handling your credit card debt is if you are using the advance payment checks that are often offered with your credit cards. They typically have even larger interest rates than your standard purchases that you make with your credit cards every day. The best thing that you can do with these advance payment checks from your credit card company is to shred them as soon as you receive them in the mail.

Reaching Your Credit Limit

Another one of the credit card warning signs is that you are reaching your credit limit on one or more of your credit cards. This is similar to shifting the alliance of your cards around from one credit card to another. How many of your credit cards are maxed out? This is definitely a warning sign for you that your debt might be out of hand.

You Do Not Have A Budget

Even if you are not maxing out your credit cards, taking cash advances, or shifting balances from one card to another, you may still have the warning signs of a debt problem. Do you have a written monthly family budget that lays out all of your family’s monthly expenditures?

This is also another one of the credit card warning signs. If you do not know where your money goes every month even down to the last cent, you have an increased potential to bridge any gap with your credit cards. It is a big danger to not have a budget helping to manage your family’s finances.

You Are Not Sure How Much Your Interest Rate Is

Do you know how much you are spending on interest payments by borrowing money with your credit cards? Do you know your interest rates that you pay? 

You should know how much you pay in credit card interest. Understanding what your interest rates are for all of your credit cards allow you to know which credit cards to pay off first. While there is consternation and a lot of discussion about whether to pay off the credit cards with the lowest balance or the ones with the highest interest rates first. 

Dave Ramsey is a big proponent to payoff those credit cards with the smallest balances regardless of the interest rate and roll its payment into the next one. Others think that you should payoff the credit card balances with the highest interest rates first which will save you the most money over the long-term.

You Are Falling Behind On Your Payments

Are you starting to miss payments on your credit cards and other debts? Missing payments is a definite credit card warning sign that you have bitten off more than you can chew. Significant credit card warning signs that you may have too much debt that you cannot handle is when you are deluged with phone calls from creditors because you are missing your credit card payments.

You Are Ignoring Phone Calls And Mail

If you ignore phone calls and even set your mail aside, then it is a sign of denial. You should be cognizant of what you do with your mail. Do you immediately shred it? Do you throw it in the corner and let it fester alone?

These are definitely credit card warning signs that you may have a problem. Also, you may see a dramatic increase in credit card offers in the mail and even harassment from creditors through the mail as you continue to approach your credit limits on your cards. You would think that it would be the exact opposite as you start to max out your credit cards, but it has the unfortunate possibility of backfiring as more credit card offers often pile in.

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These are many of the most likely credit card warning signs that you may run across if you are in debt trouble. Are there any credit card warning signs that I missed? Let me know in the comment section below.

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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 575 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


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{ 14 comments… read them below or add one }

John S @ Frugal Rules

Great work on the warning signs! I remember when I was in massive credit card debt that I ran into many of these and thankfully never plan on it again. The thing that I found that helped me the most was simply having a budget.

Reply

Hank Coleman

I think that we forget how important a budget is and how it feeds into other aspects of our financial lives.

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Kevin@ Credit Bureau Insider

Hank this is a great list. Here is one more – You respond to mail and phone call offers.

You mentioned that credit offers often increase when you reach your limits. Banks employ both response as well as risk models. In general, the riskiest borrowers respond to new credit offers most readily, and thereby get more credit offers.

Banks are always mining data to balance those most likely to respond and revolve balances, against those most likely to default. There is a very fine line.

A good strategy might be to opt out of future offers to reduce the temptation to borrow more.

Reply

Hank Coleman

Kevin,

You bring up a great point! Thanks! A great move that people can make is to definitely opt out of mailings and add their names to the do not call list.

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AverageJoe

Good warning signs, Hank. I think the budget piece is the furthest from “fire” (it’s like the early-warning sign) while the “ignoring calls” is the hallmark of real trouble right now.

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Hank Coleman

That’s a great point that warning signs can come at different times. They may or may NOT hit all at once. There are some that come earlier if you are aware and look for them.

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Leslie Tayne, Esq.

These red flags are also something you should look out for in friends and family. They might not see their spending or debt as problems and may need you to help them see their errors and get them professional help before it’s too late!

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Hank Coleman

You’re hitting on a touchy subject though and potentially interfering with other people’s finances. We have to walk a fine line with butting in too much and helping at a critical juncture. That’s a hard one.

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The College Investor

Great warning signs. I’m annoyed sometimes because my new phone number is the same as a deadbeats, and so I get calls all the time. I’d be so annoyed if I really owed the debt!

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Hank Coleman

LOL….I have had the same problem before in my last house. We would even get collect calls from jail looking for whoever had that phone number last.

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Connor Harley

These are excellent warning signs Hank. I’ll be sure to share it with my cousin. I heard recently that she has been in debt trouble. Luckily she got to resolve things. These warnings signs can help her stay out of it. Thanks.

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Elizabeth @ Simple Finance

I’ve only ever come close to reaching my credit limit once – and it was on a card that only had a $500 limit. Not enough to turn to when you have car troubles.

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Hank Coleman

Was that on a secured credit card that you put a deposit on?

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Shannon-ReadyForZero

This is a great list! I’m not sure if I’ve seen anyone list the warning signs of too much debt in awhile but it’s so important to watch for these red flags. You really covered your bases here and I’m so glad that there is a resource now that people can turn to if they question their own position with debt.

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