Do You Have Too Much Debt?
How do you know if you have too much debt? Even if you earn a high income and are currently making your payments on time, you could be in trouble if your debt-to income ratio is too high, says personal finance expert Lynnette Khalfani-Cox (www.themoneycoach.net).
Here are some warning signs:
- You have maxed-out credit cards, or cards that are
- pretty close to their limits.
- You use your credit card checks to pay your credit card bills.
- You can’t afford some of your payments, so you skip them.
- You’re not sure what your total debt is.
- You switch credit cards to get a lower rate because you can’t afford to pay the minimum on the card you have.
- You and your partner argue about bills.
- You’re stressing out or losing sleep over bills.
- When you apply for new credit, you’re turned down.
- You get phone calls from creditors or bill collectors.
- You’re using a credit card to buy things you need on a daily basis, like gas or groceries.
- You have a low FICO score because of the amount of your debt.
Khalfani-Cox says that if any of these statements describe you, you’re probably operating in the danger zone with your credit cards.