Do You Have a Debt Problem?

Just about every adult in America has some stress when it comes to finances, but how do you know if it is a debt problem or just one of the joys of being an adult?

If you are living paycheck to paycheck and only using cash, when the money runs out, you have no choice but to stop spending. However, if you are using credit cards, loans, or borrowing money by other means, you can quickly get in deep with a debt problem. It’s easier to spend money we don’t have than pulling it out of our wallets.  You may be feeling the pressure of money problems, but we can help you determine if your debt is what you need to tame.

do you have a debt problem

Is Financial Stress Causing Problems at Home?

No matter what other problems there are, if you are having troubles at home about money, then you probably have a debt problem. If you find yourself raiding your kid’s piggy bank, borrowing from friends and relatives, or hiding debt from your spouse or partner, then you have a problem. If you are embarrassed by your financial situation, you should probably ask for help, as you have a debt problem.

Are You Only Making Minimum Payments?

If you are making minimum payments only, it will take a long time (if ever) to pay off the debt. Minimum payments are designed by lenders to keep you on the hook while you line their pockets. They don’t have your best interests at heart and are counting on people to keep paying month after month, without making any headway on paying down the debt.

If you are exceeding 20% of your income to pay minimum payments, you are in danger of not having enough money to pay for rent or mortgage, food, utilities, and other things that you need to live on. If your minimum payments total up to more than 20% of your income, you have a debt problem.

Is Your Card Getting Declined?

Have you had to put merchandise back or cancel an order because your credit or debit card was declined? It happens enough that clerks rarely make a big deal about it, but that doesn’t mean it’s an acceptable way to live.

If you create a budget (and stick with it) and also know what your balances are at any given time, you can stop being embarrassed at the cash register. Declined or maxed out cards are a sign that you have a debt problem.

Do You Get Calls From Debt Collectors?

No one wants to get calls at home or at work from collection agencies harassing or threatening you. Wage garnishments and repossessions are not only embarrassing, but can make it even more difficult to get out of debt.

If you have gotten to the point that creditors are calling you, you have a debt problem.

Do You Know How Much You Owe?

Burying your head won’t make your debt go away. If you don’t know how much you owe and what it will take to get out of debt, you can’t begin to get out of debt. Being aware of your situation is the first step in becoming debt-free. You have to know the amount of debt in order to create a budget and a payment plan.

You can have a lot of money, but if you don’t know what your debt is then you have a debt problem.

Are You Robbing Peter to Pay Paul?

If you are constantly transferring money from one card to another or using a home equity loan to pay credit card debts are all signs of a debt problem. In the situation with the cards, you are caught in a vicious cycle of paying the money you owe and then putting the money back on the card. You’ll never get out of the cycle. In the case of using a home equity loan, the risks are great. Screwing up a credit card payment is bad, but losing a house is exponentially worse.

Is Your Saving Account Stagnant?

Are you trying to build up your savings, only having to tap into it every month to pay credit cards or loans? If so, you may have a debt problem.

If there isn’t any money to even set aside, you need to take care of your debt problem and get things set straight.

Are You Using Cash Advances or Payday Loans?

This is the biggest red flag. Just stop. Don’t use cash advances except in genuine emergencies and NEVER use a payday loan. If you find yourself doing either one of these things, you have a debt problem. These are predatory and you will never get out of debt using them.

OK, So You Have A Debt Problem, Now What?

If you answered yes to even one of these questions you have a debt problem. But, there is good news! It doesn’t have to be a permanent way of life. Consumer Credit of the Quad Cities has years of experience helping people get out of debt and we can help you, too. You can apply online for assistance from us and in the meantime here are some suggestions to help you get a handle on your debt:

  • Create a budget.
  • Pay as much as you can on monthly payments.
  • Try to get your payments under 20% of your income.
  • Let a credit counselor handle communicating with debt collectors.
  • Don’t open more lines of credit to pay off existing ones.
  • Review your credit reports and correct outdated or incorrect information.
  • Put aside at least 5% of your income into savings. When you pay off a debt, put all or a portion of that payment into your savings.
  • Stop using credit cards until they are paid down.

Contact Consumer Credit of the Quad Cities today to help you with your debt problem. You will feel better and you can begin to strengthen your financial health.