If you are using your credit cards for each and every need, then there are chances to face financial red flags in the coming days. Once you're irresponsible towards the credit cards, you'll be in massive financial problems that are almost impossible to run-over.
But, how do you recognize if you’re going to face red flags in your financial life?
Are you incurring debt troubles?
To know whether or not you’re heading for debt trouble, you must go through these questions. Thus, you’ll understand your financial situation and can start taking steps to improve your financial conditions.
1. Are you only making the minimum monthly payments?
Managing only the minimum monthly payments on credit cards is not a good financial sign. If you’re making the minimum monthly payments, then you’ll stay in debt for a longer time. As per the experts, you need to make more than the minimum monthly payment. Thus, you'll be able to avoid a large amount on interest rates.
2. Are you ignoring credit card statements?
Avoiding emails to ignore credit card statement will lead you to credit card debts. Face any credit card related issue and resolve them as soon as possible. Or else, you may lose the opportunity of recovering and the situation may get out of control.
3. Do you have an emergency fund?
Having no emergency fund will force you to use a credit card during rainy days. Most people incur credit card debts due to unexpected expenses. In an emergency, it becomes hard to manage both the situation and outstanding debts. So, if you don’t have an emergency savings, then you may fall into debt trouble in future.
4. Are you sure about the total principal amount owed?
Losing financial track indicates you are not living within your means. If you're unaware of the exact amount of principal you owed to your creditors, then you may face financial hardship in future. This is a crucial financial mistake that can leave a huge amount of debts.
5. Are you borrowing money to repay?
Borrowing money is not a good idea since it opens another door to debts. It can relieve you from debt troubles for some time, but again, you’ll become a slave to the new lender. So, think twice before borrowing money for repaying creditors.
6. Are you swiping your plastics for each purchase?
Once you are swiping credit cards for every purpose, then you must be aware of its consequences. Purchasing everything with the help of credit card will be your biggest financial mistake that can cost you dearly. Try to use cash as much as possible to buy daily necessities instead of using credit cards.
Final words
If you are already aware of your blunder, then try to get back your financial health. Don't make yourself a fool. Otherwise, you may end up being in the financial mess. Remember, spending more than your income and using plastics unwisely can cause a big financial problem for you. Identify the loopholes and give priority to a budget to get back a grip on your finances. Thus, you'll be able to pay off all your debts as well as achieve the financial goals in future.
