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10 Signs You're Headed Toward Credit Card Debt

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Using credit cards unwisely can lead to a mountain of credit card debt that's nearly impossible to overcome. But how do you know if you're using your cards unwisely? Here are some ways to tell you're headed for credit card debt.

1. You use credit to meet basic needs.

Retail credit card transaction
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Your wages and earnings should be used to buy everyday items like food, clothing, and gas, not your credit card. Having to use credit cards to cover these types of purchases is a sign of financial trouble. Work harder to live within your means to reverse your trend toward credit card debt.

2. You transfer balances to avoid credit card payments.

There are times when a credit card balance transfer makes sense, like to consolidate credit card balances or to get a lower interest rate. However, frequently transferring balances instead of paying down your balances is a red flag. You must figure out a way to make your regular credit card payments before you run out of credit cards to transfer balances to.

3. You skip one credit card bill to pay another.

Prioritizing credit card payments is wise. But skipping payments is always unwise. If you consistently find yourself too strapped for cash to make your credit card payments, you're already in credit card trouble. Too many skipped payments will damage your credit and leave you with fewer options for handling your debt.

4. You avoid or ignore credit card statements.

If only wishing away credit cards actually made them go away. Pretending your credit card debt doesn't exist only gives it time to grow. Facing credit card debt sooner gives you the opportunity to tackle debt before it gets out of control.

5. You charge more than you pay.

Imagine trying to fill a hole while someone shoveled out more dirt than you put in. Your hole would never get filled would it? It's the same with debt. If you're charging more than you're paying, your credit card debt will always continue to increase. You have to stop using your credit cards if you want to avoid going into credit card debt.

6. You don't have an emergency fund.

If you don't have an emergency fund, you'll feel forced to use your credit card in emergency situations. Credit card debt created because of large, unexpected expenses can be hard to pay off, especially if your budget is already stretched. You can build an emergency fund by saving a small amount each month, consistently.

7. You don't have a plan to pay off your credit card debt

The adage says "Failing to plan is planning to fail." If you're not actively working to pay off your credit card balances, you could end up unnecessarily paying on the cards for years to come. Whether you have excessive credit card debt or not, you should always have a plan to pay off your balances.

8. You use credit to "afford" expensive items

The allure of credit is that it tricks us into thinking we can afford to buy more than we really can. Truth is, only extra income or lower expenses (or both) truly enables you to afford more expensive items. Incurring credit card debt to maintain a lifestyle you really can't afford isn't a wise decision for your future income.

9. You have past due accounts

If you have credit cards that are currently past due, you've probably run into unfortunate financial trouble that's keeping your from making payments. Remember, the more past due your accounts become, the harder it will be to bring them current again. Take a look at your monthly budget for money you could spend to get your credit accounts back on track.

10. You have maxed out credit cards

If your credit cards are all maxed out, you're not headed for credit card debt, you're already in it. What now? Make a decision to pay off your credit card debt and to make wiser choices about using your credit cards in the future.

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