How to Measure Your Debt Load – Healthy vs. Unhealthy
Credit-card debt doesn’t have to be bad – but it must be managed properly. Using credit cards is one of the primary ways Americans establish a healthy credit score. Credit cards also act as great emergency fund resources when a big unexpected cost comes up – but using credit cards must be done with caution and restraint. Below I have listed a simple and short list of how to tell whether you are approaching a critical level of unhealthy debt.
Symptoms that your credit card debt load is unhealthy & critical:
- You’re unable to make the minimum payments on your credit cards
- You borrow from one card to pay another
- You’re frequently charged late fees for making late payments or going over your credit limit
- You use plastic out of necessity rather than convenience
- You cannot put money towards your savings and retirement plans because you have to make payments on credit cards
- You devote more than 20% of your take-home pay to making payments on credit cards and loans other than your mortgage.
If you find yourself in any of these money mismanagement situations, don’t fear – there is a way to recover! Finding a cure to your credit card debt may be as simple as working out better terms with your creditors, transferring your balances to a credit card that has a low interest rate or consolidating your debt with a debt management plan.
If you feel like you need outside help from a professional, reaching out to a certified credit counselor can help you get a grip on your debt. With credit counseling, a credit counselors can craft a debt-management plan that works for YOU. For more information about how to talk with a certified credit counselor about your debt, visit Consolidated Credit