Debt in and of itself is not necessarily a bad thing. After all, we all take on debt when we buy a house or car – and there is nothing inherently wrong with using credit cards from time to time, as long as you pay off your balance in full every month. However, debts can become a significant problem, and whether you are in business or trying to look after your personal finances, there are some early signs to watch out for. Let’s take a look at what they are so you are properly equipped to deal with the issue.

Credit cards – the wrong use

As we discussed in the intro, credit cards aren’t inherently evil. But it can certainly seem like it once you start to pile up the debt and start receiving enormous interest rate charges. The reality is that when you start to use credit to pay for everyday items – groceries, gas, and food, for example – it’s a definite sign that your finances are wobbling. Stop immediately, and don’t use the card until you’ve cleared your balance, or you will find things escalate pretty quickly.

Loan rejection

If you have recently applied for credit but have been rejected, it’s undoubtedly down to your credit rating. If the major credit reference bureaus have marked your cards, it can impact your life in many different ways. You’ll find it hard to get a cell phone contract – and maybe even a job. Of course, as pointed out at, it is possible to get loans for any credit situation. But you should ask yourself if passing on your debts – rather than clearing them and fixing your credit score – is a good idea first.

Big overdraft charges

Overdrafts are handy on the odd occasion, but if you find yourself paying out a huge amount of money each month on charges because you can’t get back into the black, it’s a big problem. As discussed at, an overdraft is not an excuse to spend more than you can afford, and it certainly isn’t anything close to free money. Many people end up paying three figure sums each and every month, making it one of the most expensive forms of debt. In some cases, the rate you pay back is even bigger than a payday loan.

Failed mortgage payments

However, the worst possible form of bad debt you can get is from getting into trouble with your mortgage repayments. Miss one month and you will face significant charges. Miss two and you will pay even more. But miss three, and you will be in default, leaving the door open for serious consequences from the bank. It is possible to lose your home entirely if you don’t pay what you owe, so any sign that you are missing payments – or are just about to – is a big, big warning.

An unaware partner

Finally, if you are going to great lengths to hide your financial problems from your partner, it’s a sign that you have a major problem. Be open and honest, and together you can plan a way to dig your way out of the hole – no matter how big.