When a person uses their credit and debit use is common practice, less and less people and carrying cash on them and rely instead on their debit and credit cards. Credit can also be used for college, home purchasing, a vehicle, and any other larger investment, it the balance will cover such purchases. However, when a person accumulates too much debt, it can cause a serious problems that are long-lasting and very difficult to recover from due to high interest rates. Even if a person can afford to keep up with payments, it can very very stressful to make the standard payments in the event of an emergency, credit card bills are one of the first bill to slip through the cracks.

Indicators that Credit Debt is Too High

For some consumers, it can be difficult to recognize the signs of reaching a critical point in their debt situation. Recognizing the warning signs before the debt gets out of control can prevent future problems with a person’s finance. If a person has credit card debt, it will affect their credit score and how they are preceived by potential lenders in the future. A person feeling they are on the way to financial hardship due to credit card debt should take a step back and create a budget. Apply limits to spending and lock credit cards and research into debt consolidation and how it works.

Indicators that credit card debt may be too much:

• Paying the least amount required each month.
• Carrying at least one credit card that is at, near, or over the credit limit.
• Being unaware of the total debt they are carrying and continue to buy items on the credit cards.
• Lying to friends and family about the situation of their debt and spending habits.
• Charging if a person has no money.
• Forgetting what was purchased on the credit card the previous month, including coffee, teas, and snacks.

How Does Debt Consolidation Work?

If a person accumulates a lot of debt and is having trouble making their minimum monthly payments, debt consolidation is an alternative. Debt consolidation is one large loan that pays off multiple loans that are smaller, such as credit lines, unsecured loans, and select student loans. By consolidating their existing debt, a person can take the unsecured debt and make it into one monthly payment. This process will organize credit card debt and bring down a person’s total monthly payment. There are many benefits from consolidating credit card debt which include taking control of the debt, obtaining a lower interest rate, and obtaining peace of mind and consistency with having one payment. If a person is faced with credit card debt and can't make payments, it is best to take action to remedy the problem and take control the situation.

A 3 Step Debt Relief Formula

1. Make a list of all debts. It is important for a person to know the extent of debt they are into. The list should include the lenders names, date of debt, and total amount with interest to be paid. The debts of higher interest go on top of the list.
2. Pay the credit cards with highest rate of interest first and apply more than the least requested. Paying only the minimum payment will never get a person out of debt. Credit card providers make perpetual money from minimum payments knowing the balance will never go down. Making small extra payments will save a person thousands of dollars.
3. While a person is in debt, they should start looking at methods of frugal living. Discontinue use of credit cards and do not take advantage of special offers. Save every cent possible and do not buy on impulse. Start saving pennies and use that money to pay extra on a credit card.