19 Warning Signs That Your Debt is Out of Control


While managing our finances may not always be the most exciting topic to write about, learning to identify when debt is spiraling out of control is an important life skill.

We’ve all been there, casually making minimum payments on credit cards each month while new charges pile up without much thought about how it could affect us down the road if things went south.

But at what point does easygoing spending cross the line into risking financial ruin?

As with many things in life, it’s usually the small, unchecked behaviors over time that can lead to big problems if not addressed.

Today, we’ll share 19 common indicators that it may be time to hit the brakes and take a realistic look at your debt load before it potentially becomes too late.

#1. You Can’t Afford To Save

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While most Americans aren’t great savers, the reality is if they wanted to save something, they could. But if your debt is out of control, you don’t have the option to save in the first place.

All of your monthly income is going towards paying your bills and you don’t have anything to save.

And even if you were to save something in your emergency fund, chances are you would just have to take the money back out of your safety net savings account to cover your bills.

Another scenario is you were saving extra money most months, but now you can’t because that cash is going towards bills.

While this can happen from time to time, if you notice it happening for a prolonged period, you should take it as a sign something is wrong.

#2. You Are Distancing Yourself From Others

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Shame and embarrassment are real issues people in debt face. As a result, you might start pulling away from friends and family.

You would rather be alone than spend time with others. Or you decline going out because you know you don’t have the money to pay for things.

But you don’t tell your friends you have a debt problem. Instead you make up excuses as to why you can’t go out.

#3. A Lot Of Credit Cards

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Multiple credit cards can be a sign that you are living beyond your means and could potentially lead to financial trouble. 

All too often, people rely on their credit cards to pay for things they cannot afford. 

Even if the minimum payment is made each month, the interest rate can quickly mount up and suddenly that seemingly affordable purchase becomes an expensive proposition.

#4. You’ve Been Denied Credit

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Have you been opening a lot of credit cards and were denied? This could be the credit card companies telling you that you have a problem.

It goes back to the idea of your credit utilization ratio. If creditors see this number climbing, they are going to be less likely to extend you more credit.

While they enjoy making money off you through interest charges, they know that if your credit card debt gets out of control, there is a good chance you won’t be making your monthly payment and they will have to fight to get the money you owe.

This is especially true if they notice you are maxing out your credit cards or getting close to it when looking at your credit report.

If you have debt and find that you are getting denied more credit, you might want to look into this and see if it because of your high levels of debt.

#5. Debt Collectors Have Started Calling You

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One of the worse signs debt is out of control is having debt collectors reach out. There is no worse feeling than being overwhelmed by debt and having the phone ring.

Debt collectors are relentless and can make the bad financial situation you are in feel worse. Usually this is a later sign than the others, so ideally your debt won’t get to this point.

But if you are at this point, you need to take some serious steps to get your finances in order. You might even want to consider looking into free help like credit counseling or speaking with a bankruptcy attorney.

Many times they can help you with debt consolidation that will lower your minimum payments to a level that you can afford to make them.

This isn’t something to be ashamed of, and they can help you find the best way to get your debt situation under control.

#6. You Struggle To Pay Your Bills On Time

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Related to the point above, you might start missing debt payments and incurring late payment fees.

Understand that everyone misses a payment and has to pay the late fees once in a while. After all, no one is perfect and life happens.

But if you are making late payments on a regular basis because you don’t have the cash to pay the bill on time, this is a problem you need to fix.

#7. You Are Losing Sleep

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Do you find it hard to sleep at night because you are wondering where the money will come from to pay your bills? Or you are up stressing about what bills are coming in the mail tomorrow?

Maybe you are scared that if an unexpected expense comes up, you won’t be able to pay for it. If that is the case, you’re not alone.

Money problems are one of the leading causes of stress and sleepless nights in America today.

It can be hard to sleep when your mind is racing about how you will pay for all those bills every month or if you have enough money to buy groceries.

#8. You Are Overdrafting Your Bank Account

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Maybe you are getting hit with overdraft fees from your bank because you are overspending in your checking account.

This could be from just trying to spend more than you have, or because you have too many bills coming out at once. You might also have your credit card denied when shopping.

This usually happens when you get close to your credit limit on your card. The embarrassment you feel swiping multiple cards trying to find one that works should be another light bulb moment that something is wrong.

#9. You Only Make The Minimum Payment

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When your bills come, are you only able to pay the minimum monthly payments?

While you might have more money in your checking account, you don’t want to pay too much because you know you have other bills that are coming due.

And you worry if you will be able to pay the minimum payments on that debt if you pay extra on the bills in front of you.

These hard financial decisions are all too common for people with too much debt.

#10. You Start Using Cash Advances

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If your debt is really bad, you might need to get cash advances to help pay for things.

This could take the form of tapping the cash advance feature on your credit card by using convenience checks. Or it could mean using a service to get your paycheck a few days earlier.

You might even be resorting to a payday loan to keep you afloat until your next pay day comes. This is one of the signs that happens later in the debt process, so you want to pay attention and take action quickly if you notice it.

Especially because of the interest rate this type of cash advance charges. You can pay an interest rate anywhere from 20% up to over 100%. This can lead to more debt faster than you can imagine.

Finally, something many people don’t think of when they are borrowing money with a cash advance is that there is no grace period. So the higher interest rates you are paying start the day you get the money, not 25 days later.

Because of this, you are better off borrowing money through personal loans if you get to this point.

#11. Your Credit Card Balances Are Growing Every Month

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If your credit card balances are growing each month, that is a sign that you are in trouble. In an ideal world, you pay your entire balance when the credit card statements come in the mail.

But when you only make the minimum monthly payment, when your next bill comes in the mail, the balance you owe is even bigger.

If you are finding it hard to more than the minimum payments on a regular basis, it is usually an early warning that you are headed down the wrong financial path.

#12. You’ve Begun To Ignore Your Debt

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Ask anyone in a lot of debt and they will tell you they eventually get to the point of ignoring it. It’s not that they are purposely ignoring it, but they just don’t know what to do about it.

Maybe you are getting further behind and you feel hopeless. Or you already knew you were in a lot of debt and decided the best way to handle it was by not paying attention to any new mail from your creditors or voicemails.

This is a dangerous game to play because it will only lead to bigger and more expensive problems down the road. If you are ignoring your debt, it’s time to face up to it and take some action.

#13. You Are Angry All The Time

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Having a large debt load can also make you resentful. What is happening is you are mad at yourself, but you don’t want to admit it. So you take it out on others by being mad.

It doesn’t make sense, but that is what happens. If you find yourself suddenly becoming angry all the time, it could be a sign of a debt problem.

This can lead to depression and other mental health issues if left unchecked for too long. You need to recognize this as an early warning sign and try to get your debts under control.

#14. Your Credit Score Is Dropping

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As your debt problem build up, you credit score is going to start dropping. This is because your credit utilization ratio is going to climb and creditors don’t like to see this.

For them, this is a big red flag. How can you tell if your credit utilization ratio is high? Simply add up all the outstanding balances on your credit accounts and divide this by the total available credit limit of all accounts combined.

For example if you have three credit cards, each with a $500 balance and $1,000 credit limit, you would divide $1,500 by $3,000. In this case, your ratio would be 50%, which is high.

Ideally you want this number to be 30% or less. The biggest issue with credit score is that the interest rates on your debt will be higher. And the higher the interest rates, the more money you owe on your outstanding debt.

Additionally, if you take on new debt, this too will have the higher interest rate, making it even harder to make your minimum payments.

#15. You Are Transferring Balances To Stay Ahead

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Another warning sign of a debt problem is you are using a balance transfer on your credit card debt just to stay ahead.

In some cases, you might use these transfers as excuses and end up spending more as a result. This is what I did. I was transferring balances from one credit card to another to save money on interest charges.

But after I transferred my balance to the new credit card, I would start spending on the original credit card again.

The other problem was the balance transfer fee. This fee at the time was only 3% of the balance I transferred. But these days, balance transfer fees can be as high as 5% of the balance.

This pushed me into higher levels of credit card debt a lot faster because I had more credit cards to use. So while balance transfers are a great tool if used the right way, if you are not careful, they can lead to additional credit card debt.

#16. You’re Hiding Your Debt From Others

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Are you hiding money from your loved ones or your spouse? And by hiding money, I don’t mean in a good way. I mean you are hiding the things you buy or race to get the mail so you can hide the credit card bills that came.

You might even change the subject when the topic of money comes up. If any of this sounds familiar, it is a sign that you are in trouble and need to take some steps to get your finances back in order.

#17. You’re Living Paycheck to Paycheck

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The first warning sign that you may be headed for financial disaster is when you are living paycheck to paycheck.

When there is no money left after the bills have been paid, or your bank account balance drops below a certain point before every new paycheck, this could be indicative of a problem.

Living paycheck to paycheck means that you are not able to save any money for the future, and this can put you in a difficult financial position.

#18. Your Finance Charges Are Almost As Much As Payments

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Another red flag to look out for is when your finance charges (such as interest on credit cards) are almost as much as the payments you make.

If you’re paying a lot of interest, it could be a sign that you’re not able to pay off your debt quickly enough.

This can also be indicative of overspending.

One way to address this issue is to develop a budget and stick with it so that you’re not spending more than you can afford.

You should also consider other methods of debt repayment such as debt consolidation or debt settlement, to help reduce your overall debt payments and finance charges.

#19. You Don’t Know How Much Debt You Have

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If you have no idea of your financial obligations, this could be a sign that they have started to pile up.

 Ignorance is not bliss when it comes to debt, the longer you go without knowing where you stand, the worse off you’ll be in the long run.

It’s important to gather all your bills and statements together and work out an accurate total of all your debt.

This will include credit cards, car loans, store credit cards and any other loan you may have taken out.

Once you know the size of your debt problem, you can start to make a plan to pay it off.

How to Get Out of Debt

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If being in debt wasn’t bad enough, trying to dig yourself is worse.

Combine the setbacks you face and the time it takes, it’s no wonder many people feel trapped.

But there is hope.

Here is how to get yourself out of debt once and for all.


Slash Your Bills and Save Thousands

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With inflation rising, your monthly bills are likely getting out of control.

Luckily, there are some simple steps you can take. Use this guide to help you save up to $7,000 a year on your monthly bills.


Dave Ramsey’s Baby Steps

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Using Dave Ramsey’s Baby Steps is great for getting your finances back on track.

But you could do better with a few simple tweaks to his system.


The Hidden Costs Of Debt

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We all know the financial cost of debt – paying interest to the credit card company.

But there are other costly ways debt impacts you that you need to know.


How To Save Money When You’re Broke

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When you have no money, the idea of saving sounds impossible. In fact, for many people, the idea never crosses their mind because they are only focused on getting money to survive.

But there are steps you can take to actually save money even when you are broke. Doing so will help you change your financial life faster than you thought possible.


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