Warning Signs of Too Much Debt

In a previous article, The Effects of a Missed Payment, I wrote about my attempt to convince my credit card company to forgive my missed payment and lower my interest rate back to the 5.99% I was paying before.  They said I would receive a letter with the decision once they had reviewed my account.

I got that letter.  They refused to lower it.  They said I’d have to keep my account up to date for 12 consecutive months.

I read an article recently on MSN.com that listed the warning signs that tell you if you have too much debt.  Sadly, I met almost all the criteria.  One of the warning signs was that you don’t know exactly how much you owe.  That was me.  It had been ages since I had totaled all the balances.  I finally decided to make a spreadsheet and see the damage.

I came up with $62,042 in credit card debt.  I didn’t even add in the balance for my wife’s car or a small 12-month loan I have with the bank.  I didn’t even think about the additional cards my wife has just in her name.  I’d later find out that put us at $71,857.00 just in credit cards.  When you add in the car loan, bank loan and our mortgage, our total debt is $151,815.

I was shocked when I saw the total!

Another of the warning signs is that you only pay the minimum each month.  That’s been all I could afford lately and now that I missed a payment, my biggest card payment was raised from $180 to $418, so I was really going to have trouble making the payments.

I’d like to apply the snowball method, where you pay extra on one account until it’s paid off and then apply all that money toward the next debt on your list, but I really don’t see how I will ever have much extra to pay if things remain like this.

I intend to make sure they don’t stay this way!