Credit and Debt Warning Signs

Medical Emergency

Every year, medical emergencies and other unforeseen circumstances can, and do, ruin the finances of thousands of people overnight. Many other people, however, experience a longer, slower decline into serious financial difficulty. By recognizing the warning signs of credit and debt early enough, you may be able to take steps to protect yourself and your family from avoidable financial hardships.

Do you engage in one or more of the following behaviors?

  • Do you often pay only the minimum amount due on a credit account?
  • Do you occasionally miss payments on credit accounts?
  • Do you depend on working overtime hours or moonlighting at a second job just to cover your monthly bills?
  • Have you ever consolidated your debt by borrowing from a high-interest lender?
  • Have you borrowed from friends or relatives to cover the cost of your basic monthly expenses?
  • Have you opened new lines of credit because your existing accounts had reached their limit?
  • Do you often post-date checks and rush to the bank to make deposits to cover them?
  • Do you find it impossible to save money?
  • Have you taken cash advances from a credit card account, simply to pay your monthly expenses?
  • Have you ever been refused credit or had a credit transaction denied?
  • Do you often bounce checks?
  • Do you refuse to open your monthly account statements, or hide them from your spouse or family members?
  • Are you unaware of the balances on your accounts, and of the interest you're being charged?
  • Has your debt-to-income ratio been increasing over the years, despite your regular employment?
  • Is your health, life, and auto insurance coverage far from adequate?
  • Do you often charge more than you can reasonably afford to pay off in a month?
  • Have you taken, or considered taking, a home equity loan just to meet your expenses?
  • Are you unable to set aside an adequate emergency fund?
  • Have you co-signed for a loan that you would be unable to cover in the event that the primary borrower defaulted?
  • Do you owe more on your car than the vehicle is worth?
  • Do you panic whenever you're faced with an unexpected expense?
  • Do you avoid talking with your spouse or family about your finances, or do you often argue about such matters?
  • Do you regularly spend more than you earn?
  • Have you begun to receive calls from collection agencies?
  • Do you skip paying some bills so you can afford to pay others?
You and your family

If you recognize your own behavior in one or more of these items, you owe it to yourself and your family to immediately examine the state of your finances. Was the dangerous behavior a one-time event that has been dealt with effectively, or are your problems ongoing? Are you prepared to take steps to remedy a continuing situation, or do you need the help of a professional?

Chances are, you should start with a fresh examination of your current budget. With a clearer idea of the way your money is being spent, you will be better prepared to seek the appropriate solutions.