The 5 Red Flags for Seeking Debt Relief Help

 

The following are 5 Red Flags and examples that you should watch for as a consumer with unsecured credit and outstanding debt; if any of these scenarios are indicative of your situation… you are most likely in debt trouble and should likely consider taking action which may include Debt Consolidation or potentially even Bankruptcy.

 

1.) Credit Card Confusion

1.a) Using Credit for Necessities – Credit Cards that carry interest rates should not be used to pay for necessities. If are not for If you are paying for rent, groceries or other basic living necessities with your Credit Cards because you have no cash or savings, and thus paying interest; you are most likely in debt trouble.

1.b) Too Many Credit Cards – How many Credit Cards do you have or… “What’s in your wallet?” In the United States, there are nearly 1.5 billion Credit Cards in use today – and the average consumer has 3.5 cards. If you have more than two cards in your possession and each carries a monthly balance – or worse, you have each maxed to the limit or over the limit; you are most likely in debt trouble.

1.c) Don’t (really) Know How to Count - You know how to count but do you know how creditors count? You don’t have to be an accountant or an economics major to understands the basics terminologies and methodologies of credit and interest. If the acronyms APR or DTI don’t mean anything to you, that is a problem. If you do not understand how interest compounds and have a realistic picture of how credit “works”; you are most likely in debt trouble.

1.d) Don’t Know the Interest Rates (APR) for each Card - Nearly 1 in 3 US Credit Card holders do not know the APR rate for their Credit Cards. Interest rates vary widely and are determined by a number of factors including your Credit Rating. While the national average APR is currently 15.22% rates will vary and are sometimes as high as 49.9. If you have multiple Credit Cards and don’t know the rate of interest of each; you are most likely in debt trouble.

 

2. Debt Avoidance

2.a) Paying the Bare Minimum – If you consistently find that you are making the minimum payments on your credit card and other bills each month, you are at risk of falling so far behind you may never catch back up on your own; you are most likely in debt trouble.

2.b) Borrowing from Peter to Pay Paul – If you are using your credit cards for cash advances or in general to pay off other debt including other credit cards; you are most likely in debt trouble.

2.c) Ignoring the Problem – We all know that avoiding a problem rarely makes it go away. Avoiding problems with debt guarantees they will not go away – and in most cases will cause considerable damage to every aspect of your life. If you ignore or avoid examining your credit card statements, or find yourself in denial about how much money you actually owe; you are most likely in debt trouble.

2.d) Bill Collectors Calling - If you are being called by card or collection agencies, your credit score has already been affected and these collection calls should not go ignored; you are most likely in debt trouble.

 

3. Debt Denial

3.a) Lying About Debt – If you find you are lying to others like your spouse, friends or family about the size of your debt problems, you are facing not only a financial crisis but potentially a personal one as well; you are most likely in debt trouble.

3.b) Lying to Yourself - “The first rule of holes is to stop digging”. Denial is not a feasible option and debt doesn’t just go away. Things will only get better if you take responsibility for the problem and the solution. If you are not honest with yourself about debt and actively resolving the situation; you are most likely in debt trouble.

3.c) Depleting Your Savings – The average amount of debt carried by consumers nationally is over $15,000. If you find yourself depleting your savings or investments, just to make the monthly ends meet, you are placing your financial future in jeopardy and; you are most likely in debt trouble.

 

4. Debt Acceptance

4.a) Continuous Charges – If you are aware of your credit situation but continue to charge more money than you are making in payments on your Credit cards, your debt could triple in size before you know what happened.; you are most likely in debt trouble.

4.b) Accepting New Offers – If you are still signing up for credit cards despite a mounting pile of debt and carried balances, especially with the intention of using one to pay the others, you are facing years upon years of an uphill battle against the credit companies; you are most likely in debt trouble.

4.c) No Budget and No Plan to Get Out of Debt - “Let it be” was a classic song by the Beatles but falls short of a strategy for getting out of debt. In fact, a more likely and almost guaranteed result is “Helter Skelter”. If you are like nearly 40% of Americans and do not have a budget. If you have a budget but do not “stick to it”. And equally as important if you do not have a concrete plan (with numbers) for getting out of debt; you are most likely in debt trouble.

 

5. Don’t Know Where to Go for Help

5.a)  Seeking Professional Help - Albert Einstein famously stated, “Problems cannot be solved by the same level of thinking (or actions) that created them.” The answer to getting out of debt will almost always include some combination of spending less and/or making more. Often that is not enough. Knowing more is also integral to any realistic solution. Doing more is mandatory. If you do not have a clear plan and strategy, cannot adequately and effectively resolve the situation in a fixed time frame, and don’t know where to go for help; you are most likely in debt trouble.

 

Top 3 Debt Relief evaluates Debt Relief Professionals & Agencies by state and nationally and includes trusted referrals. Our website offers numerous informational resources and includes tools for budgeting, debt calculation, and real solutions to Debt Consolidation & Relief. When you decide to get more information and possibly seek help; Many resources and reputable professionals exist to inform, evaluate and help you address your debt problems. There is a lot you can, and will need to do; however many people realize they do not have the time, energy or expertise necessary to address this major problem.  If you have made the decision to seek help, and are in need of financial counseling or other assistance… a legitimate counseling agency can assist you.