Let’s face it, everyone loves to spend money. Everyone wants something and they will go great lengths to get what they want. Those of you who have credit cards know what it is like to look at your favorite trinket and then pay for that trinket with credit. You get whatever joy or satisfaction out of what you just purchased, and then reality hits you and you realize that you are in way too much debt. Many people have done this and continue to do this type of thing. As a matter of fact, somewhere around a million people have the “spend now, pay later” mindset. A lot of us do not know where the ceiling is on our spending. The question then arises: exactly how much debt is too much debt?
It is best for you to try to find out if all of your money is being spent trying to lower your debt. Gather all of your credit card information such as your statements and other financial reports. You will then calculate the number of minimum payments that you make on these items. Now you will factor in your gross monthly income. If your debt payment does not exceed 36% of your gross monthly income, then you are fine. If your are spending 50% of your income to try to lower your debt, then it is time to rearrange your financial situation.
Second, you’ll need to work not to get yourself into further debt. In other words, do not purchase anything with your credit cards. You will add more of a burden on your already high amount of debt. If you are able to spend less on something (like moving to a cheaper apartment) or even sell your car (if that is a feasible option), this would be a very good start to lowering your debt.
Another way of telling that you have accumulated too much debt is by seeing if you can make the minimum payments on your credit cards. If you can barely make your monthly payments, then you have accumulated too much debt. To relieve this situation, contact your credit card company and see if they will be able to lower your interest rates on your credit cards. If you have a good history of making your payments as they come due, the credit card company will look favorably on this and more than likely they will lower your interest rates.
Yet another indication of your debt being too high is your credit score. The more debt that you have, the lower your score will be. If you try to get another line of credit and you are denied, then this is indicative that you have too much debt.
Whether you have too much debt or now, remember the following: Always try to make your payments on time, whether your credit is good or bad. Always keep up with your monthly payments so that you will not become insolvent. Be careful not to have an enormous amount of payments and never try to pay off one debt by using another line of credit.