In this day in age, credit cards are convenient as well as easy to obtain. But just because you qualify for multiple credit cards and high credit lines doesn’t mean you should use them. In fact, one of the biggest reasons Americans file for bankruptcy is because of credit card debt that spun out of control.
Is your credit card spending driving you to bankruptcy court? Here are a few questions to ask yourself:
Do you rely on your credit cards to pay for your monthly expenses? Credit cards should be reserved for real emergencies such as a vehicle breakdown or an unforeseen medical procedure. Using credit cards merely to get by on a month-to-month basis without paying the balance off each month means that you are living beyond your means. If your credit card debt continues to pile up, you could soon end up with debt you cannot afford to pay back.
Do you know how much you currently owe on each of your credit cards? According to a spokesperson for a national nonprofit that provides financial counseling, one of the biggest mistakes people make is being afraid to see their financial standing for what it is. If you don’t know how much you owe on your credit cards, chances are that you are buying your head in the sand instead of facing your debt head on.
Check back later this week for the third question to ask yourself in effort to determine if your credit card spending could be driving you to bankruptcy or worse.
Source: Daily Finance, “10 Signs You Are Headed Toward Financial Ruin,” Ellen Chang, Sept. 19, 2014