“I don't really have a debt problem. Right?”
We all know the story about the frog and boiling water. If you turn up the heat gradually, the frog will not pay attention and will eventually be cooked. The same thing is true of debt. You'd never borrow $10,000 with nothing to show for it, but adding $100 or so to your credit card balance each month doesn't seem like a problem. Until the water starts to boil...
So how can you tell if like the frog, your debt is slowly killing you?
We've come up with a list of indicators that it's time to be concerned about your debt.
Review the list below and see if any of these apply to you:
❏ If the amount you owe on credit cards and personal loans is increasing each month
❏ If you use a cash advance on one card to make a minimum payment on another
❏ If the interest rate on your credit card increases to the upper teens or higher
❏ If you have to choose which bill you'll pay late this month
❏ If your credit card balance is more than 50% of your credit limit
❏ If you've been rejected when you applied for a new credit card or personal loan
❏ If you've paid overdraft fees twice in the last 3 months
❏ If your credit score has dropped more than 25 points in the last 6 months
❏ If the total that you pay in credit card minimum payments, student and personal loans totals more than 10% of your take home pay
❏ If your mortgage is more than 30% of your take home pay
❏ If car payments are taking up more than 15% of your take home pay
❏ If you find that you don't have any money left at the end of the month to add to an emergency fund or retirement account
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