How do I know if I’m over my head with credit card debt?

I think we all have a love/hate relationships with credit cards. When you are eyeing something, whether it’s clothing, jewelry, or maybe even an opportunity, the possibility of using a store credit cards seems like a great idea. Maybe it’s the option to buy now and pay later, or rewards like cash back, or maybe just convenience- whatever your reason is, it sure seems like a win-win. Ans sometimes it is. But sometimes, it’s not. It might work well and in your favor at first, but if you’re like a lot people, you don’t manage a credit card like you should. Remember, the cards are stacked in favor of the credit issuer, not the holder. (insert documentation). So if you are not playing the game to make sure you don’t fall in the traps, you will become trapped.  For those who might not know, credit card companies assign interest on a monthly basis, depending on the rate at which you are assigned when you sign up for the card. Unless you have a promotion for a 0% interest rate, (more on that in a bit) if your balance is not paid in full by the due date, the amount will be assigned a “charge” of a certain percentage and then added to that balance. This is now your new total. You can see that there is a LOT of room for error- or really misjudgment- on your part.  It becomes like the proverbial “frog in a pot” concept…where at first it might seem nominal, but as time goes on and you are not making significant payments, the interest charge grows your balance quite significantly. Miss a payment and things can get much worse real fast. The card issuer may raise your interest rate, lower your limit (or both) and now you are left with a mounting debt AND negative credit impact. All of a sudden, that shimmering whatever-it-was that got you here is now a dark stain. There is a lot of emotional toll here that I think we don’t give enough credit to (no pun intended, seriously). like regret, shame, anger at ourselves or even the circumstances. Unfortunately, if you have this situation happening in multiples- it can completely spiral. Some people take on more debt to tackle current debt. I would NEVER recommend this (read about why here). So how do we know when we’re in trouble with credit card debt? Let’s start by asking a few important questions. First, ask yourself if you are emotionally overwhelmed. Seems like a weird place to start, but if your debt has you in a place where you are actively WORRYING about it, you are most likely not actively FIXING it. Next, ask if you are scrambling to make payments every month. Have you missed payments? Are you moving money around or borrowing to cover it? If you have answered YES to both of these questions, you are most likely already in over your head. In the next post, we’ll discuss how to start digging yourself out!