6 Signs You Need Debt Settlement

Credit card debt is not uncommon in America today, but how do you know when your debt is out of control? Here are six warning signs your debt is a major problem.

• You consistently make only minimum payments on your credit cards


• You receive demanding letters and phone calls from creditors


• You have depleted your savings account to pay credit card bills


• You hide your spending from your spouse and familiy


• You have made three or more late payments in the past twelve months


• You consider bankruptcy as a solution to your debt

Minimum payments on Credit Card Debt

Credit card debt can be very misleading since your monthly payment can be very low compared to your overall debt. For instance, the minimum payment for $20,000 of debt is only around $400 per month. This can allow you to make large purchases and only pay a small portion of the debt. However, if you only make minimum payments on your credit card debt, that $20,000 debt will take you more than 30 years to repay. You'll also pay double or triple the borrowed amount in interest charges alone. Only paying the minimum payments on credit card debt will slowly but surely drain you financially.

Demanding letters and Phone Calls from Creditors

Banks and credit card companies often use demanding letters and phone calls to collect late payments and fees. If you are the receiving these threatening letters and phone calls, you are not only in serious debt but your credit score is in jeopardy. Creditors report every missed or late payment you make, and an excessive amount of absent payments is extremely detrimental to your credit rating.

Depleted Savings Account

A savings account is used to build for the future, but you are in financial danger if you constantly tap into your future reserves to pay credit card bills today. A portion of your income should go into some form of savings. A sign you have over stretched your budget is if you have not only stopped saving, but use your current savings just to make minimum payments on credit cards.

Hiding Your Spending

Money is one of the top five reasons people give for divorce. Many people hide their overspending from their partners because they feel embarrassed and want to avoid conflict. Yet, marriage ideally is a partnership, and when one spouse discovers hidden purchases, trust is broken. If you find it necessary to keep spending habits secret from your significant other, you have a dangerous amount of debt.

Late Payments

Your payment history constitutes approximately a third of your credit rating. If you make three or more late payments in a year, your credit rating will significantly suffer. Nevertheless, the cause of late payments gives more rise for concern that the effects. If you are living paycheck to paycheck, unforeseen events can cause you to miss a payment. You cannot overcome debt while incurring late penalties, especially when you're only making the minimum payments on credit card debt.

Considering Bankruptcy

Bankruptcy is a decision that will destroy your credit for seven to 10 years and permanently change your life. Some people make the mistake of filing for bankruptcy without first considering the alternatives. Debt consolidation is a debt-relief method that involves combining your debts and lowering interest rates. Debt settlement is another debt-relief option, but debt settlement actually reduces your overall debt instead of merely combining balances.

If any or all of these warning signs are applicable to your financial situation, you need to act quickly before debt ruins your life. Millions of Americans suffer from the unwanted stress debt produces. The first step in conquering debt is overcoming the fear of letting someone help you. A reputable company with a proven debt-relief method, such as debt settlement, will guide you toward a debt-free life. The choice to become debt-free will be the best financial decision you ever make.