Is it Time for a Credit Intervention?

Everyone complains about being strapped for cash from time to time, but for some, being in possession of a dwindling bank account and a massive credit card bill feels like a never ending occurrence. If you’re one of those people, you might have convinced yourself that you have it under control, but do you really? Here are some of the warning signs to look out for that might indicate you need to give yourself a credit intervention.

You Have Debt Across All of your Cards

If you have more than one credit card and carry considerable debt across all of them, that’s a big red flag. It’s fairly normal for people to have more than one credit card (they often serve multiple purposes/offer different rewards) but when you start borrowing more than you can pay back on all of these cards, you’re putting yourself at serious risk of getting in over your head in debt.

You Shuffle the Debt around from Card to Card

Another warning sign that you need a credit intervention is if you frequently shift your debt around from card to card during bill paying time. If you find yourself needing to use one card to pay off another, and then reversing to pay back the first card, you’re juggling funds that don’t actually belong to you to keep your bank off your back.

You’re only Making the Minimum Payments each Month

While it’s good that you’re not completely ignoring your balance, only making the minimum payment each month is not going to help you pay off your account any time soon. Only paying the minimum balance should be kept as a last resort if you’ve got bigger debts to tackle first or if you’re in between jobs/are suffering from a loss of income and need to maintain the status quo until you can afford to pay more.

You Spend More than You’re Making

it seems like no matter how well you budget, you always end up spending more money than you actually have. You’re always looking ahead and relying on the hope of future income to eventually pay off your current balance and wind up in a constant cycle of ‘catch up’.

Go through your expenditures for the past couple of months and add up all the costs of things you really didn’t need. Whether it’s fast food, impulsive purchases at the mall, gray charges on your credit cards and/or services you don’t actually use often enough to justify paying for, chances are you’ll be shocked to see how much money you could be saving.

You Carry Over a Balance that Exceeds 30% of your Credit Limit

In general, it’s best not to go over 70% of your credit limit, and that’s only if you know you’ll be able to pay it all (or most of it) back by the end of the month. If you know you’ll be carrying a balance, it shouldn’t exceed 30% of your total credit limit. If you find yourself frequently carrying over large balances, it’s time to re-evaluate your spending habits.

You Find Yourself in Overdraft Constantly and Need to Borrow Money from Other People Fairly Often

This one is probably a given, but if you find yourself always dipping into overdraft to pay off your bills (or if you constantly need to ask for money from friends, family, and your bank), you’re spending more than you can afford to.

If you’re still uncertain whether or not you need a credit intervention, here’s a checklist to help you gauge your debt level.

Still not sure about you stand? Fill out our online application here.