Credit is a useful tool when used correctly, but relying on credit too much can put you in a bad situation financially. Keep reading for some of the early warning signs of developing credit problems that every consumer in Edmonton should watch out for.
1. Monthly max-out Maxing out your credit card month after month is a clear sign that you’re having a hard time managing debt. It’s also viewed as risky behaviour by lenders, so if you make it a habit you could end up paying higher interest rates. Credit or debt counselling from Edmonton’s Moses Advisory Group can help you create a budget so you’re not wasting your hard-earned money on interest payments. 2. Minimum payments Minimum payments might seem like an easy way to keep cash in your pocket but will end up costing you more in the long run. Just paying the minimum amount each month because you don’t have the cash to cover your expenses is a clear sign that you’ve run into some credit troubles and you might benefit from credit or debt counselling. 3. Savings in short supply Sudden changes in your life like job loss, divorce, illness or another unexpected expense, can happen to anyone, at any time. Saving a minimum of six months’ worth of monthly expenses will prevent your debt from spiralling out of control in times of hardship. Start slowly and build your savings over time so that you don’t have to rely solely on credit when life deals you a difficult hand. 4. No budget Having a budget and knowing where your money goes each month can help you detect bad spending habits and cut out unnecessary expenses. Most people know exactly how much they spend on rent and bills but might not have any idea how much they’re spending at the local coffee shop each month. Track your expenses to see exactly where your money is going and how you can reduce your expenses. 5. Living on credit Charging your groceries to your card can come with certain benefits like reward points or other savings. But if credit is your only means of feeding yourself and your family, then this may indicate that you’re having trouble managing your debt. Get into the habit of not charging anything to your card that you can’t pay off within the same billing cycle. That way you’ll avoid paying interest on everyday expenses. Credit problems can happen to anyone, at any time. That’s why it’s so important to know the signs of credit troubles and seek credit and debt counselling help when you need it. There is a light at the end of the bad-credit-tunnel and the certified debt and credit experts at Moses Advisory Group can help you find it. Contact us today to learn more about debt consolidation, consumer proposals or our other debt solutions, or to schedule an appointment for credit or debt counselling.