In our latest video, you’ll find friendly Lisa, and she is going to teach you about the top 10 warning signs of debt. We wanted to figure out a way to educate consumers, and we know that a video can do a great job of that. This video is mainly for consumers that may not think they have a debt problem, or they are one life-changing event away from falling into serious debt. These are signs of things that you could be doing or not doing that could lead you into financial trouble.
One of the first things that Lisa covers is the fact that you don’t have any savings. When someone doesn’t have any emergency savings, they will usually rely on credit cards or loans to pay for those unexpected things. This can create problems because not only do you have to pay back the borrowed amount, but you could get hit with high interest rates and find yourself underwater pretty quickly.
The second warning sign that Lisa talks about is when you only pay the minimum on your credit cards. While paying the very minimum each month will keep you from getting hit with a late fee, it will also take you years (10-20) to pay it back depending on the balance and interest rate. If something happens and you can’t make the minimum payment, you’ll be hit with fees and your next minimum payment amount due will be higher. This is a very sticky situation to be in, and we see this happen to so many consumers. This vicious cycle starts, and they can’t get out of it, and before they know it, they are in over their head.
The third tip that the video mentions is one that most of us are guilty of every single day. It’s when you use credit cards to pay for everyday purchases, such as gasoline, movie tickets, coffee, groceries, etc. Using a debit card and/or cash is what you should be doing.
When you swipe that credit card, even for small purchases like cigarettes and gum, you are getting hit with an interest rate. Even if your credit card has an interest rate of 0% right now, you are still using credit, and credit utilization (debt-to-credit ratio) has an impact on your overall credit score. Credit Utilization accounts for a high percentage of how your credit score is determined. The recommendation is to keep your credit card utilization rate as low as possible, preferably never exceeding 30%. So every time you swipe that plastic for any purchase, big or small, you are affecting your credit utilization and could be damaging your credit score.
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The video goes on to explain many more warning signs that consumers should take heed of. If you find yourself in one or more of these types of situations, give us a call today. We can help you find ways to budget, save money, and save yourself from falling into debt.
Even if you’ve already found yourself knee-deep in debt problems, give us a call. We have helped over 400,000 people become debt-free and regain control of their finances. We’ve been assisting consumers since 1968, and we’re here to help.
The phone call is completely free and confidential. There are no obligations, and we don’t try to sell you anything. We are a Non-Profit Credit Counseling Agency that educates and assists consumers with financial problems. Call us at 866-699-2227 or chat with us online at www.advantageccs.org to find out how we can help you!