When I sit down to talk with someone about their finances, I get the basic information about how they are positioned in various areas of life such as age, kids, income, 401k contribution percentage and balance, other investments, rent/mortgage, other debts, etc…the standard questions a financial planner asks to quickly assess a situation. Something that is more common than I’d like it to be is hearing about the way people “manage” their debt load. When I read this article about credit card addiction, it really struck a chord with me. I have heard each of the 10 behaviors that indicate a potential problem with credit cards…recently. Actually, I’ve heard all of them in just the last week.
Many of the things I hear make me want to make sure that I address them very directly, so that a solution can be found. They seem like “normal” behaviors to so many people, but if they were to take a step back, remove themselves from the equation and say whether they’d recommend this to their family members, I can almost certainly say that they would not make these things a part of anyone’s “to do” list. So if you see any of the following things going on in your life, you might want to hit the brakes and talk with someone who can help you develop a new set of financial behaviors. These are the behaviors (forgive the similarity to a certain comedian that was popular a few years ago) that should raise a red flag and provide the spark for you to start a conversation with someone who can help you make progress from where you are today:
- If you have no clue how much debt you’re in and just keep making the minimum payments, you might just be a credit card addict.
- If you can’t find your card and it’s making your pulse rate go up because your only source of spending is missing, you might be a credit card addict.
- If you get excited every time you get a new credit card offer in the mail, AND you apply, you might be a credit card addict.
- If you’re taking an advance from one card to pay off another, you might be a credit card addict.
- If your interest rate or annual fees go up and you don’t care since you’re happy to still have a card, you might be a credit card addict.
- If you use your credit card as your only emergency fund, you might be a credit card addict.
- If you are paying for everyday expenses like groceries or rent or things that aren’t needed, you might be a credit card addict.
- If you are maxed out on all of your cards and you get declined for new cards, you might be a credit card addict.
These behaviors are not healthy and can be a sign of a serious financial crisis ahead. If you’d like to reverse this seemingly endless cycle, talk with an expert immediately. There are ways to stop the bleeding and make progress before you get to bankruptcy court. The key is getting help and taking control. In next Friday’s blog post, I’ll talk about what to do to make that progress.