10 Signs That You are Headed Into Credit Card Debt Danger
If you haven’t noticed, unless we make some drastic changes, our nation is headed into a literal Credit Card Debt tsunami. As credit has tightened and banks are seeing the errors of their ways, (i.e., easy credit approvals) more and more credit card companies are raising interest rates if you even smell like you are having financial problems.
The reverberating effects can be chilling; consumers are waking up and finding out that credit card debt has put them in the dreaded financial danger zone. There are some distinct signs to let you know if you are headed into trouble. Heed this advice and you’ll surely avoid the stress and strain that comes with credit card debt.
Credit Cards Nearly Ruined My Life
One credit card customer (I’ll call Bradford) wrote me to explain how credit card debt nearly ruined his life. He had a wallet full of credit cards, 15 in all! An American Express, 3 Visas, 3 MasterCard’s, 2 gas cards, 4 credit cards from major retailers and 3 credit cards from national jewelers.
All of Bradford’s credit cards except 2 of the jeweler’s cards had balances; eight of them were maxed out. Since he was only paying the minimum monthly payment on each account, it would be around twenty years before he would have most of the balances paid down. And that was provided that he stopped accumulating new charges.
What Happened To My Credit Line?
Bradford’s wake up call came one day when he attempted to make a major purchase (a vehicle no less) on a Visa credit card that had a line of credit at $10,500.00 and was declined. He called his credit card company to find out what was going on and that was the first time he heard about the company’s credit card policy. Every credit card company has one. It’s written in very small print and is always neatly tucked away so that it is hard to find and even harder to read.
In his case, the small print stated the credit card company had a right to alter his credit line and interest without notice, period and end of story. In an instant, in accordance with their policy, his bank chopped his line of credit down from $10,500.00 to $1500.00. Plus, they raised his interest rate from 8.5% all the way up to 23.75%.
Why? Because they ran a credit check, (which they have a right to do) and saw that Bradford’s credit card debt was no longer in a safe income to debt ratio. Right after that company cut his credit line and raised his rates, all of his creditors followed suit. Bradford was now in the credit card debt danger zone. In the rest of this session, let’s talk about how he got there. When Bradford took our test and failed; he knew he had to make changes and fast! To measure where credit card debt has taken you, take the test now.
Test #1
Do you generally only pay the minimum payment on your credit card or other loan balances?
Test #2
Are you habitually sending your payments in late?
Test #3
Do you have one or more credit cards that are maxed out?
Test #4
Do you find yourself skipping payments so that you can have cash on hand?
Test #5
Do you use credit cards to pay for things you should be paying for with cash?
Test #6
Are creditors calling you regarding late payments?
Test #7
Are you spending more than 10% to 15% of your take home pay on credit card debt and other loans?
Test #8
Have you ever taken credit card cash advances to meet living expenses?
Test #9
Is your credit card debt bothering you, emotionally, mentally or spiritually?
Test #10
If you had no credit card debt, would you be able to save money every payday?
If you answered, “Yes,” to just two or more of these test questions, you are definitely headed into debt trouble, if you are not already there. If you find yourself in trouble, stop what you’re doing and seek help now!
Joel Marks
http://www.articlesbase.com/credit-articles/10-signs-that-you-are-headed-into-credit-card-debt-danger-678840.html
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