Credit Card Debt Trouble Warning Signs

The Top Nine Credit Card Debt Trouble Warning Signs

With credit cards comes responsibility. It is incredibly easy for credit debt to get out of control if you’re not careful. You want to catch this before it spirals out of control. This can be easier said than done, especially if you don’t pay attention. We’ll talk about credit card debt trouble warning signs. By the end of this article, you’ll know what to look for with credit card debt trouble.

What are the signs you are in credit card debt trouble?

Nine Credit Card Debt Trouble Warning Signs

1. You have trouble making minimum payments.

One of the earliest signs of credit card debt trouble is struggling to make the minimum payments. A minimum amount is a bare minimum you pay to avoid late fees. You’re not doing yourself any favors by only paying that and no more. For example, if you have a credit card you charged $5,000 on with a 19 percent interest rate. You can only afford the minimum $125 payment each month. At this rate, you’ll pay it off in almost 23 years. To add to that, you’ll pay an extra $6,973 in interest alone.

2. You ignore monthly statements.

People are under the impression that if they ignore their bill, it’ll go away. They couldn’t be more wrong, and it’ll be harder to get out of credit card debt. Furthermore, each time you miss a payment, you get late fees, and no payment fees added. Eventually, it’ll go to credit collections, and your credit score will suffer after as little as 30 days.

3. You rely on credit to buy luxury items.

Credit cards can trick someone into thinking they can afford more than their lifestyle allows. The truth is, this is an easy way to get into credit debt. The only way to truly afford luxury items is by lowering your expenses or raising your income. Furthermore, you also want to reduce credit card debt. If you choose to use your credit card to maintain your lifestyle, you may be going toward credit card debt trouble.

4. There are frequent cash advances.

Many credit card companies cap how much you can take out for credit card cash advances. This is supposed to be for emergencies, and you should limit doing it. So, if you find yourself drawing cash advances frequently, this is a credit debt warning sign. It’ll only get worse because it’s expensive to do this. You will start accruing interest right away, and there is no grace period. All of this adds up quickly, and you’ll pay back much more than you took out. This is one of the worst bad credit card habits.

5. You miss payments.

Another early sign of credit card debt trouble is missing payments. Your credit card company may forgive one, but they’ll start adding late fees after that. If you make this a habit, your credit score could drop by as much as 50 points. Missed payments are a sign that you’re not managing your finances well, and it’ll get worse if you don’t catch it. Also, if you add the additional fees on each time you miss a payment; you’ll go even deeper into credit card debt trouble.

6. Your credit cards are maxed out.

If you max your cards out, you’re already in credit card debt trouble. You should only be using a maximum of 30 percent of your credit limit. If you go higher with your credit utilization, it looks bad to lenders. Also, you’ll have to reduce credit card debt by scaling back your spending. If you don’t, your credit score could suffer. Lastly, your minimum payments will go up as well, making it harder for you to afford them.

7. You have past due accounts.

One or several past due accounts usually means credit card debt trouble. You’ve dug yourself into a hole you can’t get out of. The more past due any account is, the harder it is to catch it back up. So, look at your spending and find money you can use for your past due accounts. You want to catch them up and keep them current.

8. You skip your credit card bills to pay others.

If you put your credit card bill last and don’t have money left, you have a problem. It is a sign you’re already in credit card debt trouble. You should have enough money to pay your bills and have left over funds. So, if you don’t, you’re living outside of your means. You’ll have to cut back on your spending and prioritize your bills. The more payments that you miss, the more damage your credit score is going to suffer.

9. You take money out of your savings or retirement.

If you’re taking money out of your retirement account early, you lose returns you would have gotten. If you dip into your savings, that’s less you have in the event of an emergency. The rule of thumb is to have at least three months worth of your salary saved as an emergency fund. Also, with no savings, you have a greater risk of adding more debt to your credit card. This will get you deeper into credit debt, and it’ll be harder to get out of.

In conclusion, this article has given nine signs of credit card debt trouble. If you’re not careful, you can ruin yourself financially, and it’s hard to fix it. So, being responsible with each of your credit cards is critical. Finally, if you recognize the warning signs, you may be able to avoid credit debt.



CreditFast has reviewed the best balance transfer credit cards on the market. Some of the credit card offers are from our advertising partners. CreditFast has objectively reviewed the features and benefits of each credit card. We have chosen balance transfer credit card offers based on our editor’s recommendations.

Monica Kowollik

Director at CreditFast.com
Monica has covered credit card and personal finance news for over 15 years. From an early age, she developed an interest in financial literacy and saving money. Monica hopes to help others to improve their personal finances one article at a time.

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