Five signs that you have too much debt

Debt is a bit like that extra weight that we all put on from time to time - very easy to gain but much more difficult to get rid of. But how do you know when your borrowing is getting out of control?

Whether you are a seasoned credit card user, or a first-time borrower, it is easy to let things get out of hand. So if you think you might have a problem, read on to find out whether you need to rein in your spending for a while.

A lot of your income goes on repaying debts
When you are in debt, it can sometimes feel as if your salary arrives in your account, only for the majority to disappear immediately to make the necessary debt repayments. If this is the case, then it is fairly certain that you have taken on too much debt relative to your income.

If you do not take matters in hand now, you are likely to fall in to the vicious circle of borrowing more to cover your everyday living costs because you cannot afford to live once your existing debt payments have left your account.

So set a budget based on the amount of money you have left over each month once your debt repayments have been made, and do your best to stick to it even if it means going without luxuries for a few months.
You make only the minimum repayments each month
Credit card companies love people who make just the minimum repayment every month, because it is these people who make them the most money due to all the interest they pay.

Setting your monthly repayments at the lowest possible level is therefore a surefire way to increase the cost of your borrowing and stay trapped in debt for longer.

Instead, you should set the monthly repayments at the highest level you can afford and reap the benefits further down the line.
You borrow through more than one credit card or personal loan
When money is short, it can be tempting to take out a second credit card or loan once you have spent the cash afforded you by your first means of borrowing.

Some people have a veritable army of credit cards in their purses and wallets.

But while using different cards at different times to take advantage of benefits such as rewards and cashback can be a good idea, borrowing on a range of cards can only usually lead to trouble - and the same is true of personal loans. One reason it is so dangerous is that it can be virtually impossible to keep track of how much you owe, and what interest rates you are paying on your debts.

If you have several cards or loans, it is therefore a good idea to consolidate your debts on the lowest possible interest rate and concentrate on repaying them rather than adding to your debt burden by maxing out your capacity to borrow.
You have started missing payments
Over eight million Brits missed paying regular monthly bills last year, with credit card bills the most likely to be ignored or forgotten, according to figures from comparison website Moneysupermarket.

If you too have reached the point where your debts are so big you have started missing repayments, then it is definitely time to take matters in hand.

Not only will missing payments mean incurring charges - most credit cards charge about £12 for late payments, for example - it will also mean paying even more interest on your borrowings and reduce your chances of being accepted for credit in the future.

Depending on what repayments you are missing, it could even lead to the loss of your home or bankruptcy.
You have been refused credit due to your poor credit score
When you apply for credit of any kind - be that a credit card, personal loan or mortgage - the lender offering the product will almost always run a check on your credit file.

If you have missed payments in the past, or already have a lot of debt relative to your income, you are likely to be rejected for the best deals as a result.

If you are having to look to the deals aimed at people with poor credit scores, not only will you pay more interest, it is also a sure sign that further borrowing is probably not the answer to your problems.
For help with debt problems, contact Citizens Advice or the Consumer Credit Counselling Service, both of which offer free debt advice.
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