Signs That You Need Credit Card Counseling

by John_S on August 7, 2011

Credit card counseling is a good option for cardholders who are heavily indebted and find it difficult to put their finances (and life) in order. There are some signs which hint that one’s financial health is affected, and the advice of an expert may come handy.

If you don’t have any cash but hold a couple of credit cards in your wallet, this is a red flag already. The problem is even worse if you are paying credit card debt with cash advances from another credit card. Unless you are paying a high interest credit card with a low interest one, you are really not helping yourself.

The situation is out of control if you cannot meet the minimum payment on more than one card, and this doesn’t happen occasionally. You cannot get rid of debt if you are unable to even make the minimum payment. Here comes the minimum payment syndrome. Your debt-to-income ratio is a good indicator of your financial health. In this relation, Gain Cunningham, spokesman of the National Foundation for Credit Counseling explains that debt load should be no more than one fifth of one’s take-home pay. Car expenses should be taken into account. For example, if your monthly car payment stands at $200, and your salary is $1,000 a month, you should not even think of having a credit card or other debt.

Having a roof over one’s head is a major concern of many people. If you’ve reached a point at which you cannot meet your mortgage or rent payments and make cash advances, you need expert advice. Being heavy in debt and having nowhere to go is the last thing you will want. On top of that, if you cannot cover your bills, and your utilities have been shut off, you put your safety and health at risk.

Then, if your credit card debt has already gone to collections, it is definitely a sign that you have to seek help. But this is not the end of it. Not having any savings shows that you are at risk of getting in debt. Charging items to your credit card when you can’t even pay it off also makes matters worse. Not even knowing how much debt you have accumulated adds insult to injury. You may realize this only after you have been denied credit.

So, do you lie to your family and friends about your debt and spending? If yes, this is another sign you may have too much debt. Deep down inside, you probably realize the extent of your debt problem. Sadly, it is much easier to deny your financial problem than to face it. You can make things worse, however, if you don’t address your problems and change your ways. In some situations, a couple of accelerated card payments and a bit of financial belt tightening are of help. Yet, if you are in a debt crisis, which you cannot handle by yourself, you may need credit counseling.

Comments on this entry are closed.

Previous post:

Next post: