Danger signal #1: Expense UP, Income DOWN
Your credit card debts increase while your income is not- or even worse decreasing. When this occurs stop using your cards and manage your expenses on whatever cash you have available. Hold back when the cash is finished unless there is an emergency.
Danger signal #2: Can't Pay Minimum
You are not able to pay more than your minimum balance on the card debts. This is usually a consequence of danger signal #1 but this is the time to get your financial house in order and deal with a mole hill of a debt before it turns to a mountain.
Danger signal #3: Owe Everyone
You find yourself borrowing from Peter to pay Paul. This is a wakeup call that you are entering a danger zone of unmanageable debt. Do not get into this habit as it will only lead to an explosion of bigger debt.
Danger signal #4: Losing Track
You lost count. You lost count on how much debt you have. You lost count on how many credit cards. You lost count on who you owe. There are many people who advocate the use of only fixed number of credit cards, some two, some as many as five but make sure you know how much debt is owed. And if you have little self control make sure you keep the number of credit cards to a minimum to avoid overspending, leading to unwanted debt.
Danger signal #5: Too Many Emergencies
You are finding yourself into further debt due to emergencies. Only one problem: it's not really an emergency. The new Apple gadget is not needed on an emergency basis. You're friend wanting to borrow money is not an emergency- at least for you. It's okay to be a good friend but letting people borrow money from you can complicate your relationships and your financial status. Prioritize what's important to count as an emergency. A car repair for example is an emergency because getting to work will be difficult if you don't have a means of transportation.
Danger signal #6 Working More Hours
Your credit card payments keep you working overtime – if you discover that you do not have sufficient funds to cover your credit card payments causing you to look for a second job might mean several things. It could mean that you overspent or you might need a better way to increase income to support a sufficient lifestyle. Analyze this situation but be sure that when you are working more hours than you want to, it may mean your way over your head in debt.
Danger signal #7 All Maxed Out
You have a limit on your credit cards. When you happen to find yourself to have maxed the limits on your credit cards –this evidently indicates you that your need to decrease expenses and/or increase income.
Danger signal #8 Expensive Habits
Smoke, gamble, or drink? Well, those are expensive habits that can warn financial disaster ahead. Be careful not find yourself spending too much money on things that doesn't benefit your life.