Living in debt can lead to high interest payments and possibly even insolvency. Symptoms of excessive debt include making only the minimum payments and maxing out credit cards.
Those with excessive debt are often those who make only the minimum payments on their credit cards. Paying only the minimum amount can mean that it takes decades for the cardholder to pay off their credit card debt, instead of months or a couple of years.
Maxed-Out Credit Cards
A constantly maxed-out credit card is another sign of excessive debt. Consolidating debt and setting up a budget can help reduce debt more quickly and eliminate credit card temptations.
Trouble Paying Bills
Those with excessive debt often lack sufficient money to pay off their bills each month. They may pay off just a few of their bills and leave the others to enter the overdue period.
Savings and Retirement Funds
Those with excessive debt often use their savings or retirement funds to pay their bills, which can have consequences for their financial and retirement goals.
Spending more than 15% of one’s income in servicing debt can be another sign of excessive debt. Budgeting can also help in this case.