Depending On Debt

Most of us carry two or more credit cards, each with balances over $5,000. While some debt is good debt, failing to manage our money properly or experiencing a financial hardship can easily send a good debt into a bad one. If you are one of many who depends on credit to make it each month, you could be headed into financial trouble or end up in bankruptcy.

The Signs Of Bad Debt

There are some signs that could indicate your credit debt is headed down the wrong path:

• Using credit to pay for essential living expenses
• Paying one line of credit with another
• Transferring balances too often to afford the payment
• Making only minimum payments out of necessity
• Missing or making late payments multiple months in a row
• Accounts with a balance at or exceeding the spending limit

Keeping Good Debt

If you recognize any of the signs above, there is still time to take action and prevent financial disaster:

• Stop using credit cards and pay in cash; if you can’t afford it don’t buy it
• Contact creditors to negotiate a payment arrangement
• Pick one card to target paying as much as you can until paid off, paying minimums on the rest
• Pay down your cards until they are at least 40 percent below the total spending limit
• Leave your cards open after they are paid off to see an easy credit score boost