10 Signs You're Headed Toward Credit Card Debt

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Replied by FrankN on topic Great tip!

100% agree. And once you are in that situation, its almost impossible to get out of it.
2 years 1 month ago #1

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Replied by JGibbs on topic Great tip!

Goldbug wrote: The story I normally encounter was someone using the cards for points when an emergency came up, and because the cards were there they used it. By the time things cleared up they normally had the original money to pay off, but also a few months of interest and that can be all it takes for someone to tip into debt.

That's true and it wouldn't take much to send a family spiraling. A sudden death or medical emergency would easily do the trick. The interest rate on some cards is significantly higher now too. I'm diligent about saving my money and keeping an emergency fund for worst case scenarios, but lots of people did the same thing and still didn't have enough to weather the recession.
2 years 2 months ago #2

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Replied by Goldbug on topic Great tip!

JGibbs wrote: I use my cards for everything. I'm all about the points, cash back, extended warranties, just any extra value that buying with a credit card can bring. I don't charge more than I can pay and I pay them off every month. I wonder how many people started out with the best of intentions, but wound up in debt doing the same thing. It's something I need to keep in mind.

The story I normally encounter was someone using the cards for points when an emergency came up, and because the cards were there they used it. By the time things cleared up they normally had the original money to pay off, but also a few months of interest and that can be all it takes for someone to tip into debt.
2 years 2 months ago #3

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Replied by JGibbs on topic Great tip!

I use my cards for everything. I'm all about the points, cash back, extended warranties, just any extra value that buying with a credit card can bring. I don't charge more than I can pay and I pay them off every month. I wonder how many people started out with the best of intentions, but wound up in debt doing the same thing. It's something I need to keep in mind.
2 years 2 months ago #4

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Replied by Tishbel on topic Debt debt debt

That's a very useful article. I think the first sign that credit card debt is becoming a problem is carrying a balance and only paying the minimum monthly payment. The minimums usually don't cover the interest so if you do that, the debt is just going to start creeping up and people just don't seem to be aware of that.
2 years 2 months ago #5

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Replied by FrankN on topic Debt debt debt

Goldbug wrote:

FrankN wrote: Lexie, I am sorry to hear that, and surprised you were actually able to do that anyway. I hope you made it out okay.

I've heard that from a few people who got into debt. Taking a cash advance from one card and using it to make the minimum payment on another is effectively robbing Peter to pay Paul. The charges for the cash advance just made the debt larger and put the problem off. Well done for getting out of it, Lexie.


That is exactly right. You are really delaying the inevitable. I am working with a family who was doing that for 6 months and did not realize all of the fees and charges that were being added. It really made their situation much worse.
2 years 2 months ago #6

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Replied by Goldbug on topic Debt debt debt

FrankN wrote: Lexie, I am sorry to hear that, and surprised you were actually able to do that anyway. I hope you made it out okay.

I've heard that from a few people who got into debt. Taking a cash advance from one card and using it to make the minimum payment on another is effectively robbing Peter to pay Paul. The charges for the cash advance just made the debt larger and put the problem off. Well done for getting out of it, Lexie.
2 years 3 months ago #7

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Replied by FrankN on topic Debt debt debt

Lexie, I am sorry to hear that, and surprised you were actually able to do that anyway. I hope you made it out okay.
2 years 3 months ago #8

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Replied by Lexie on topic Debt debt debt

I recognized we were in trouble when we began using one credit card to make payments on another credit card. We inevitably ended up in bankruptcy and learned a valuable lesson. Never again!!
2 years 3 months ago #9

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Replied by FrankN on topic Debt debt debt

MikeJ, please let us know how you are progressing to your emergency fund savings goal!
2 years 5 months ago #10

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Replied by Moneyes on topic Top 10 Signs

Charging more than you pay should be the first indicator that people see. We need to be in the habit of paying more than we charge.
2 years 5 months ago #11

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Replied by Tishbel on topic Debt debt debt

A year's worth might be difficult to reach, but its a good target. I normally hear three months, and that's what I try to keep. If you're keeping a full years reserve, that's a lot of money and I'd suggest you look at investing it somewhere that gives you a very good interest rate on it!
2 years 5 months ago #12

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Replied by FrankN on topic Debt debt debt

That is a great goal, and I am not sure you absolutely need a full year's worth of living expenses. As long as you are investing that emergency fund, I think that is a great idea.
2 years 8 months ago #13

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Replied by MikeJ on topic Debt debt debt

Yeah, an emergency fund is invaluable. My goal is to maintain a full year's worth of living expenses (at my current lifestyle level). I'm not quite there yet but I'm working on it.
2 years 9 months ago #14

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Replied by FrankN on topic Debt debt debt

That is good you were able to take a positive out of your bad situation. I am sorry you had to go through that, and I am glad you came out of it positively.
2 years 9 months ago #15

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