There are several signs your credit is controlling you but if you learn to recognize these signs early, you can get your personal finances back on track. Getting a credit account is an excellent way to build a credit score. Also, a credit card is useful during an emergency. But if you're not careful, credit can slowly take over your life. Here are seven signs your credit is controlling you.
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1. You Spend for Reward Points
Spending for reward points is one of several signs your credit is controlling you. A rewards program is an excellent way to earn points or cash back for every dollar you spend. And sometimes, points earned can go towards a statement credit, merchandise and even travel. But just because you have a rewards credit card doesn't mean you should spend recklessly. Some people get caught in the excitement of earning points and let their debts get out of hand.
2. All Your Extra Cash Goes to Minimums
If you never have cash because all your disposable income goes toward paying off credit cards, there's a chance that your credit is controlling you. Credit card debt is one of the biggest traps and it's an unending cycle. And unfortunately, if you continue to charge items to your account you may never dig yourself from under debt.
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3. You’re Struggling to Pay Bills
Everyone deals with tough times on occasion. But if you're constantly struggling to pay your bills — primarily because you have too much credit and debt — it's time to wake up and develop a debt elimination plan. It's easy to get into debt, but it's not easy to pay off balances. And the more you owe, the harder it is to pay rent, auto payments, utilities and even put food on the table.
4. You Can't Buy a House
If you're dying to buy your own house, but can't because your credit isn't in the best shape, there's a good chance that your credit is controlling you. Credit affects buying a house on different levels. Too much debt increases your debt to income ratio and a lender may decide that you can't afford a monthly house payment. Also, too much debt can lower your credit score, preventing you from meeting a lender’s minimum credit requirement.
5. You’re Afraid to Open Statements
Whether your statements arrive in the mail or via email, if you dread opening your statements because you don't want to deal with balances, then your credit is probably out of hand. You can't run from debt or bad credit. And the sooner you come to terms with your situation, the sooner you can take control of your personal finances. Stop hiding from statements and assess the damage. Resolve to stop charging and look for ways to earn extra income.
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6. It’s a Status Thing
Some people carry a credit card for peace of mind during an emergency but others view credit cards as a status symbol. However, this kind of thinking gets people in trouble. A credit card is a useful accessory in your wallet, but only if you can afford the charges.
7. You Can’t Leave Home without One
If you're trying to stop spending, financial experts recommend leaving credit cards at home. If you can't do this, then your credit is probably controlling your life. Getting serious about your credit and debt requires acknowledging the problem. And to overcome the situation, you have to take drastic measures. For example, cut up your credit cards or freeze them.
You may not realize that credit is controlling your life. However, if you can’t do anything without a credit card, or if you’re constantly worrying about your debt or credit, it’s time to take back control. What are other signs that credit is controlling your life?
