Getting in over your head in credit card debt can be scary. And when it happens, you need to come up with a plan to get your finances back on track. But how do you know if you have too much debt? Here are three clear signs that you might’ve bitten off more than you can chew.

You Can’t Afford Your Monthly Payments

This is the sign you can’t ignore. Whether you are struggling with too many credit cards or you’re facing down one large balance, if you can’t even afford to make your monthly minimum payments, you’re in over your head. However, even this sign is a rather extreme form of being in over your head. Here’s another signal to consider: Any credit card obligations you currently have should be able to be paid off in no more than five years and ideally no more than three.1 If you can’t afford to do that, you’re probably in over your head.

Your Balances Keep Rising

Let’s say you’re making your monthly minimum payments. That should be all you need to do, right? The problem with this strategy is that any balance left over can accrue interest. This interest will make your balance increase year over year, or even one month, to the next. This is a sign that you’re either in over your head, or on your way there.

Your Cards Never Seem to Get Paid Off

If you have a loan you never pay off, you know you’re not handling your money properly. A credit card balance is basically a loan, yet too often it’s not approached that way; few assume they are mishandling their money if they never fully pay off their credit cards. But just like a car loan or a mortgage, you should always be working toward paying off your credit card completely. If you can’t see the needle moving in that direction, you’re in over your head.

Finally, remember that getting in over your head with credit isn’t a moral failing. You’re not a bad person; you’re just a person who needs a little help getting back on track. Admitting that you’re in over your head is the hardest part. Once you do that, you can start taking actions to reestablish a healthy relationship with credit and finances.


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