Serious debt problems rarely come without warning. And most of the time, people don’t see the warnings until it is too late. The following are indicators and warning alarms that you are getting into debt over your head and action is required:

A greater portion of your income goes to paying debt. As your debt balances begin to grow on your credit cards, you will find that more of your disposable income goes towards paying the minimum payments on them. This of course is obvious. However let’s examine what paying the minimum payment means. As your credit card balance gets higher, you will find that only a few dollars goes to paying the principal (the balance) and most goes to satisfying the interest on the debt charged by the credit card company.

You begin managing debt through credit card convenience checks. So as your debt increases, you find that more of the income you make goes towards paying them. As interest rates increase, you also find more cash going towards debts. Then, you receive convenience checks from your credit card companies with low interest rates for using them. But the fine print on these convenience checks says they will charge a convenience check transaction fee and it will be treated like a cash advance. Not only that, your cash advance debt balance and purchases debt balance on your credit card are treated differently. Future payments you make will get applied on the cash advance balance first. Remember that the convenience checks offered a lower interest rate. So while your payments are going towards paying down the interest rate on the convenience check balance, they are not getting applied toward the higher interest rate you are carrying on prior purchases. Guess what? The interest accumulating on the unpaid purchases balance is making your overall debt increase much quicker. And your debt mess gets bigger.

You begin managing debt through cash advances. So now that your debt has really started to get out of hand, you need cash and you ran out of convenience checks. Now you go to the bank window and get a cash advance. You wonder as you wait at the teller window if the bank teller knows how much debt you have on that credit card you are getting an advance from. You tell yourself that you are managing your money wisely as you ask the advance be deposited into your checking account so you can pay bills. Now, you find yourself taking a cash advance on one card to pay the bill on another. And then later taking a cash advance again on the latter card to pay the bill on the first one you took a cash advance from.

Your finances are totally out of control because of debt. With all this creative financing you have done to manage your debt, the end becomes inevitable. Your debt and finances are totally out of control. You don’t even track the balances any longer because they are incredibly out of reach for repayment. Now, you have to start paying cards late on purpose just so you have disposable income to pay things like the utility bill. You can’t get anymore cash advances because all of your credit cards are maxed out or over their limit.

If all the above is happening to you then you need to get advice from a financial counselor or other qualified advisor as to how to turn this situation around. But make no doubt about it. Your debt is too much.