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Credit cards can seem like lifesavers when you want or need to make a large purchase. It’s so easy — like buying something on someone else’s dime.
That is, until you overextend yourself. Then, you realize that you ultimately will pay an amount far beyond the initial purchase price.
Sound familiar? Here are 11 signs to determine if you are carrying too much credit card debt.
1. You’re in denial
Does the thought of being in credit card debt frequently cross your mind, but you tend to push it out of your brain? This may be the first sign that you are in over your head.
Are you lying to your spouse, family and friends, who may be concerned about your outrageous spending habits with the magic plastic? Or maybe you routinely ignore phone calls in fear that creditors are on the line wanting to know when you will catch up on those past-due balances.
2. You don’t know your outstanding balance(s)
Although you’re aware that your credit card debt exists, you don’t feel obligated to check the outstanding balances because you can’t pay them off anyway.
3. You can only afford to make the minimum payment
Known as the “minimum-payment trap,” this behavior is a recipe for disaster because no damage is being done to the outstanding balance. Instead, you are simply paying the interest as the balance continues to grow. This is the sad reality for many, because they cannot afford to pay anything more than the minimum amount.
4. No wiggle room exists in your budget
Once all the bills are paid each month, you can barely enjoy the little things in life. A night out on the town or a even ordering a pizza without using a credit card is not feasible because funds are always low. Even worse, you may resort to credit cards to cover basic necessities, such as gas and groceries, because your bank account is overdrawn or barely hanging in there.
5. You have a hard time saving
It is impossible to save money because credit card bills quickly absorb any available cash on hand after the household bills are paid. Unfortunately, not having a savings account in place will only make the debt worse, because you will not be able to handle financial emergencies without resorting to the magic plastic.