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Credit cards can boost your spending power and give you the resources to handle emergencies, but these debts can quickly get out of hand. Having too much credit card debt can cost hundreds of dollars in interest every month and leave you vulnerable to financial hardship if you suddenly lose your job. Below are a few signs that you may be carrying too much credit card debt.

How to Tell Your Credit Card Debt Is Too High

1. You’re Using One Credit Cards to Pay Another

Some credit cards offer attractive interest rates to new account holders who transfer balances from other lenders. However, if you’re routinely using one credit card to pay off another, you’re likely burdened with more debt than you can carry. To make matters worse, many lenders charge exorbitant fees for this service, which could put you deeper in debt.

2. Credit Card Payments Consume Too Much of Your Budget

credit card debtIf you’re spending a significant portion of your monthly income on credit card bills, you may not have enough to afford food, clothing, and other basic necessities. Unfortunately, you may have no choice but to put these expenses on your credit card, starting a cycle of debt that can be difficult to break.

Ideally, your credit card payments shouldn’t exceed more than 10% of your monthly income. If you exceed this figure, you’re likely accumulating more debt than intended.

3. You’re Only Making Minimum Payments

The minimum payment due on your credit card is calculated to maximize interest income for the lender, not help you get out of debt. If you can only afford the minimum every month, you’ll likely wind up paying back several times what you borrowed in the long run.

4. Your Debt-to-Income Ratio Is High

Your total debt amount compared to your monthly income is a key factor in calculating your credit rating. If your debts are more than 30%-40% of your income, you may not be able to qualify for a mortgage or an auto loan in the future. If possible, paying down your balances and avoiding new debt can quickly increase your credit rating.


 

If you’re struggling with burdensome credit card debt, the bankruptcy attorneys at Padgett & Robertson, Attorneys at Law can help you get your finances back under control. They’ve been serving struggling borrowers throughout Southern Alabama for over 40 years, and pride themselves on creating personalized plans for every client. Visit their website to learn more about debt relief options or call (251) 342-0264 to schedule a free consultation today.

“No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”

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