5 Telltale Signs You’re in More Debt Than You Realize

Debt denial is all too real. It’s easy to fall into the trap of thinking that if you turn a blind eye to your mounting financial problems, they’ll somehow disappear. As tough as it is, it’s important to face reality head on. Every day you delay just complicates the situation and prevents you from really taking charge of your financial health.

It’s worth asking: Am I in debt denial? It’s helpful to look at the evidence when you’re making an assessment. Here are five telltale signs you’re in more debt than you perhaps initially realized. 

You Make Minimum Payments or Less Each Month

Are you in the habit of making minimum payments on your credit card balance? Or paying even less than the minimum, resulting in late charges and diminishing credit? Paying the minimum balance doesn’t do anything to cut down on your repayment time, nor does it address rising interest rates. So, you’ll ultimately end up paying more over time.
The ability to pay more than the minimum balance each month is often a sign of financial health. If this seems impossible from where you currently stand, your debt may be controlling your actions instead of the other way around.

Your Savings Account Is Stagnant or Nonexistent

It’s easy to put savings on the backburner “temporarily” while you address debt. But too much of this is just dangerous. This means you’re one emergency away from landing in hot water. So, keep an eye on your saving habits. If you’re among the ranks of the 69 percent of Americans with less than $1,000 in their savings accounts, it’s time to take a good hard look at the root cause. 

You’re Avoiding Mail and Phone Calls

If opening the mailbox or receiving a call from an unknown number provides a jolt of stress, you may be suffering the effects of debt-related anxiety. It’s no fun knowing a collector could call you at home or work. A growing pile of collection notices and late payment notifications is just a physical reminder of your debt.

If you’re sick of feeling hounded by multiple creditors at increasing frequencies, it may be time to pursue a formal debt relief strategy to regain control of the situation. Debt settlement through a partner like Freedom Debt Relief or a similar organization is one possibility. How does Freedom Debt Relief work? Professional negotiators work with your creditors to reach an agreement that’s less than your current amount owed—provided you pay it in a lump sum. Meanwhile, you pay a set amount of money into an account each month until you reach the necessary threshold.

While you’ll still receive collection calls during the debt settlement processes, there’s often comfort in knowing that you have a strategy working in the background. After all, the only way to truly end collections is to zero out your balances. 

You Keep Accumulating Revolving Debt

One surefire sign that your debt situation may be teetering out of control is that you’re considering taking on more revolving credit, like credit card balance transfers. Or, you already have. Credit cards can be a very useful tool. But with high interest rates, it’s risky to use them to continually rack up more debt and fund your lifestyle.

You’ve Been Rejected for Credit

Have you received any recent credit rejections? As NerdWallet writes, “That means creditors or card issuers see reason to believe you can’t or won’t repay money you borrow.” This should serve as a wake-up call as to the state of your financial reputation.

If any of these signs describe your financial life, get out your metaphorical magnifying glass and take a close look. It can be tough to confront debt head on, but it’s the only way to break free.

 

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