Most of us carry some sort of debt at any given time. Debt lets us spend beyond our means, it lets us buy things that we otherwise not afford. It allows us to buy houses and cars, but as you may have heard there is no such thing as a free lunch and that applies to debt. Debt comes with a cost and that is in the form of interest.

To be able to use debt we have to make regular monthly payments, these payments include the principle and interest. While it’s great to be able to buy houses and cars, debt can get out of hand. When you find yourself having difficulty paying off debt then you have run into trouble and your debt is getting out of hand.

Here are some signs that you are in trouble.

  1. Time to Repay:

    When taking on debt, we have to decide on the term of the debt. The longer the term the lower the payments as the debt gets spread over a longer time. This may seem to be a good idea as the payments will be lower. However, keep in mind longer repayment term also leads to higher interest payments. If you are having trouble paying off debt, then lower regular payments are more attractive. Just be aware that you are paying more over the long-term.

  1. Trouble paying off credit cards:

    We should be paying off the full balance on the credit card statement. Carrying a balance leads to interest charges that make credit cards expensive. You may be in even bigger trouble if you are having problems paying the minimum amount.

  1. Using one card to pay off another:

    Taking on debt to pay off debt is probably the worst possible route to making debt payments. If you have to use one credit card to pay off another credit card, then you are likely in serious debt trouble.

  1. Refused for Loan:

    If you are continuously being refused for loans then your credit score is likely in bad shape probably due to late payments and large debt. This is a red flag that you have too much debt.

  1. Using cash advances to pay bills:

    Taking a cash advance from your credit cards is a bad idea as cash advances come at a high cost. By taking a cash advance to pay a bill creates another higher bill which can get you right back in trouble.

These are some of the warning signs that your debt is out of control and that its time to take action to get back to manageable debt.

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