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Too much debt: How to know when you're in over your head

Most people have some amount of credit card debt. The issue isn't really that people have debt, though, it's that so many people have too much.

As someone who likes to carry a balance for the purpose of raising your credit, you know that it can be dangerous if you lose your job or forget to make a payment on time. It is costly when you consider the interest and fees you could pay, too.

How much credit card debt is too much?

A Jan. 7 news report shows that credit card debt has risen by $36 billion, as shown by the New York Federal Reserve in November 2018. That speaks volumes as to how confident people are that they can take on debt, but it doesn't necessarily mean they can pay it off. Too much credit debt can weigh you down and threaten your financial security.

How do you know you have too much debt? It comes down to a few things. If you are:

  • Making payments on credit cards with other credit cards
  • Maxing out your credit cards
  • Only making enough to make minimum payments
  • Using the majority of your credit

...then your credit card debt is too high.

All is not lost if you're struggling with debt, though. You can start by sitting down and drawing up a budget. If you can't make ends meet, begin to cut back where you can. Once you know how much you really need to earn to maintain your lifestyle, you can adjust for that. If it's not a manageable amount of money, then your attorney may be able to help you with bankruptcy or other debt-reduction methods.

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