If you’ve ever wondered if your debt is out of control, you are one of many. You might even call this particular question an FAQ of modern society. Credit is an undeniable part of life in America, and at a social and cultural level, it’s simple to see its purpose and the positive potential it provides families. However, when you drill down to individuals and families, it’s just as easy to see how debt can spiral out of control. So, if you want to know if your debt is out of control, watch for the common warning signs.

1. Your “Debt” Grows Each Month: If your balances are growing month by month, despite on-time, regular, or even substantial payments, you may have a spending problem. Increasing your credit balance month to month is never a good sign, and you should pinpoint the problem before it escalates.

2. You Applied for New Credit & Denied: Lenders make money by lending money, but they aren’t in the business of giving money away. When they receive an application, they approve or deny it based on the borrower’s likelihood to repay the loan. A denied credit application is a strong indication that you are considered high risk. Being considered high risk is usually due to excessive debt or negative marks on your credit report.

3. You Depend on Credit to Pay Bills: If you borrow money from family/friends or pull a cash advance to pay bills, it means there is a problem. Especially since a cash advance is the very worst possible use of a credit card (almost universally receiving an exceptionally high-interest rate and additional fees).

4. Your Credit Score is Dropping: There are many reasons that a credit score can drop. However, two of the most common are: a balance carried a long time and a high credit utilization ratio. If you see your credit score dropping, it’s often an indication that you are either filling up your available credit or carrying balances without decreasing them month-to-month (or both), which is not a healthy sign for your finances.

5. You Transfer Balances Frequently: If you transfer your debt to new cards (with low introductory rates) regularly, you may be in a cycle of transferring debt instead of paying off debt. It seems helpful, but introductory periods end, and if the debt is continuously being transferred and never being paid off, you aren’t doing yourself any favors.

6. You’re Making Minimum Payments or Late Payments: Credit cards have multiple benefits, but they’re only beneficial if you pay them off each month. And when you only pay the minimum payment, you end up paying a lot more than you may expect, especially if you add late payments on top of standard fees and interest.

If you are in debt and you need help filing bankruptcy , call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney to ask about getting a fresh financial start. We help good people through bad times.

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