6 Warning Signs That You May Be in Financial Danger by Eliza Roberts

Many people get stuck in huge debts without even realizing where things went wrong. Clearly, recognizing the warning signs of a financial problem is important in avoiding bad debt. In this article, we've presented six red flags that you could be heading towards the debt trap. Being aware of these signs should motivate you to take action right away before the problem gets worse.

You're usually late in paying off your bills. Some people forget or neglect to pay their credit cards until another bill arrives. Do you find yourself in a similar situation? Are you often late in submitting your payments? Are you even aware of your due dates?

Remember, each time you pay your bills late you also incur the additional late penalty charges. Why should you pay more when you can save on those extra charges by simply submitting your payments on time?

You're using credit cards without considering your repayment. Do you frequently find yourself using your credit cards without even stopping to think about repayment? For instance, do you even stop to consider whether you can afford to pay back your charges on time? Or are you contented with submitting just the minimum due payment on each of your cards each month?

Obviously, this habit presents a big threat! Sticking with just the minimum payment and continuously using your credit cards would eventually lead to debt build-up. Remember, the longer you prolong your credit card payments, the bigger your debts become because of the high interest rates and fees.

You take out cash advances from your credit card to pay other bills. Using your credit card for cash advances is definitely a big no! These are not covered by the grace period and most cards charge a higher APR on cash advances. Even if you managed to pay off your other bills, you are still left with debt in your account, perhaps even more than the debts you've paid.

You're not aware of how much debt you really owe. If you're not even aware about how much your debts are, then obviously you're in trouble. Do you put away your monthly statements without even looking at them? Do you often ignore your creditors when they try to contact you?

Arguments between you and your family because of financial issues. Financial issues and stress can really take its toll in family relationships. If your finances are starting to get in the way of your life, then it's definitely time to do something about it. Understand the root of the problem and work out a positive solution. If you feel you need help, don't hesitate to get assistance from a trusted credit counselor.

You use your credit card for your daily necessities. If you charge even the smallest expenses to your credit card, you are putting yourself in great danger. Credit cards must always be used with discretion. Bear in mind that failing to pay your bills on time automatically increases your debts by as much as 25% more because of the interest and late penalty charges.