The warning signs of unmanageable credit card debt
Countless people across the state of Florida and the entire country live paycheck to paycheck, unable to accumulate savings or fully establish their financial security. And while using credit cards allows many people to pay for necessities, relying primarily on personal lines of credit to cover monthly expenses can quickly result in serious financial difficulties. Provided below are several warning signs of excessive consumer debt.
While financial advisors recommend that people put 10 percent of their income into savings, the U. S. Bureau of Economic Analysis recently estimated that most people only save a little over 5 percent. If people are not contributing to their savings, and are instead primarily maintaining their lifestyle by relying on credit cards, they may be contributing to an unstable financial situation. Instead, the goal should be to invest one’s energy and money into lowering credit card debt.
Another sign of losing one’s financial footing that people should be aware of is losing track of how much one actually owes in credit card loans. Similarly, not keeping track of one’s credit limit and/or maxing out one’s credit card can be incredibly detrimental, as doing so can have a negative impact on one’s credit rating. When people allow their debt/credit ratio to become too high, typically 35 percent or higher, their credit score can suffer.
Maintaining a credit score of 600 or higher is a positive sign that a person is lowering his or her credit card debt and on the path to financial stability. People with questions or concerns about their financial situation can speak with an lawyer today about debt relief options that may apply to them.
Source: Daily Finance, “10 Signs You Are Headed Toward Financial Ruin,” Sep. 19, 2014