So how do you know to get rid of debt?
1. You only have to pay the lowest credit card costs per month
The minimum payments for credit and stored-value cards are usually set at a shallow level, meaning that if you only pay the minimum monthly payment, it will take a long time to pay off your credit card debt fully, and you may be able to pay more than the interest you spend on the card.
2. Your expenses are higher than your income
If your credit card balance increases every month, you may be living above your assets.
If you spend more money than you can afford and plunge into a financial crisis, you can quickly calculate it by calculating the debt-to-income ratio. Add up your monthly net income (this includes any wages, tips, benefits, or other regular payments you receive) and then add up your monthly debt expenses (this includes credit card payments, loan payments, mortgage or rental payments) including your bills) I can’t pay last month! ). Now divide the monthly debt expenditure figure by the monthly income. This is your debt-to-income ratio. If the number is 0.36 or higher, it is time for some settlement of your debt.
3. You have forgotten the total amount due (and you don’t want to know)
If you don’t know how much money you owe or how to pay your debts, it’s time to take stock, make plans, and keep your debts under control.
4. You often pay your bills too late
If you don’t pay on time or your credit card or overdraft limit exceeds the limit, the lender will charge you extra. This puts you in even more debt and can hurt your creditworthiness.
5. You use your credit card for everyday necessities (and you know you can’t pay it off in full before the end of the month)
If you use a credit card to pay for food, travel, or rent, and you can’t pay it off every month, your debt will increase, adding to your financial worries. Now is the time to find out where your money is going and make some changes.
6. You have used your savings to pay regular bills, and there are no remaining emergency expenses
If you don’t have savings to deal with emergencies, such as a broken boiler, a leaking roof, or a car breakdown, you will be forced to use credit to pay these unexpected payments, adding to your debt.
7. You borrowed from a lender to pay back the money
If you’re using one loan to pay off another, you’re adding interest to the interest payment – this isn’t a good way to get out of debt!
If you’ve already paid off your credit card but are still using the credit card, your debt will only increase. Stop using credit cards and take steps to control your spending.
8. Your credit has been declined
If you’ve missed credit or loan payments in the past and have now filed to decline more credit, you may have poor credit. You can use Experian’s free report to check your credit limit.
9. You sleep because you are worried about your financial situation
Do you hide debts from your family or argue about money? Are you concerned about paying your bills so that you don’t fall asleep or affect your work? Then it’s time to take action to get out of debt.
10. You are afraid to answer the phone and ignore the “looking formal” envelope
Ignoring debt does not eliminate debt. If you are faced with your debt, there are some measures you can take.