CNNMoney reports “Americans have a debt problem.”
Yeah, well, we could have told you that.
Every third person in America owes so much in payments, that their account is considered “in collections.”
The good news is the debt might only be $25. The bad news is the average amount owed is just over $5,000, with some debts as high as $125,000. The super duper bad news is delinquent debt can put your credit score in the toilet…for years…even if you’ve paid off the debt. And a wrecked credit score can hurt many things from employment opportunities to securing loans.
While it may seem that your debt crept up on you, there are warning signs…here are just seven of them:
- You hide bills from others.
- You use a credit card for most purchases, and only pay the minimal balance.
- You have little or no savings.
- You believe that checking account overdrafts are a normal part of everyone’s financial life.
- You don’t know what your living expenses are because you have never tracked your spending.
- The loss of a job in the household would cause an immediate financial crisis.
- You borrow money from payday loan offices, pawnshops, or title loan companies.
More debt warning signs included in the Money Possible workbook. (pdf, page 13)
Need help getting your debt under control? Consider a credit union, where some offer financial education programs and have financial counselors on staff, or contact your local non-profit credit counseling agency like Kansas Consumer Credit Counseling Service.