10 Signs You Have a Debt Problem

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  • When debt begins to impact your everyday life, you may have an issue.
  • Debt does not represent a permanent way of life. There's help available.

No matter your level of debt, it doesn't have to last forever.

According to a 2021 CNBC report, the average American has $90,460 in debt. While this number represents everything -- from housing to credit card debt to auto loans -- it's still a burden for many. Research has shown that debt can trigger anxiety and depression, and it can cause headaches, insomnia, or an inability to focus. That's likely because most of us worry when we're getting in too deep, afraid we don't have an exit strategy.

Before we detail what to do about excess debt, let's cover how to know if you're in over your head. Here are 10 signs debt may be a problem in your life.

1. Avoiding the mail

If you can barely stand to walk to the mailbox or open your email in fear there will be another bill staring you in the face, debt could be to blame. If you allow bills to pile up on the kitchen counter because you know you'll have trouble paying them, the problem could be too much debt.

2. Receiving collection calls

Once you begin receiving phone calls, letters, emails, or text messages from creditors or debt collectors, you can be sure you're in too deep.

3. Being denied credit

If you're turned down for a loan, and the creditor says it's due to "credit utilization," that means you have too much on your financial plate.

4. Lying about how you spend

When you find yourself fibbing to the people you care about, telling them you used money for one purpose when it was spent in another way, there's a debt problem.

5. Using credit card advances

If the only way you can come up with cash in an emergency is to take a cash advance on a credit card, debt has wormed its way into your life.

6. Paying the minimum

If you've racked your brain for a way to pay more than the minimum payment on your credit cards but can't come up with anything, it's probably because debt has robbed you of enough spare cash to get ahead.

7. Transferring debt from one card to another

Transferring high-interest debt from one credit card to another with a 0% promotional APR can be an excellent strategy for paying a credit card off faster and saving money on interest. However, if you're doing it because one card is filled to the brim with charges and you need to free up some credit, there's an issue that needs to be dealt with.

8. Spending impulsively

If you're so stressed about your finances that the only thing that makes you feel better (if only for a moment) is spending more money on something you can't afford and don't need, it could be due to overwhelming debt.

9. Losing sleep

Tossing and turning at night, trying to come up with a workable solution to your money problems, is a sure sign that you're carrying too much debt.

10. Feeling hopeless

If you've all but given up on the idea of taking control of your debt, you know you have a problem. As discouraged as you may feel, there is hope. In fact, there are several paths that can lighten the financial load. Keep reading to learn what you can do. And if one approach doesn't work for you, try another way. Nobody else is going to fix it for you.

Finding the solution that works for you

The next time you're outside the house, look around. Every single person you see, everyone you encounter, has problems of their own. It's a condition of life. No matter how weighed down you feel by your current financial situation, it won't last forever. Take a look at these debt payoff plans and see if one looks like a good fit for you.


If you're the kind of person who likes to do things on your own, that's not a bad thing. If you're determined enough, these steps can help you cut debt down to a more manageable level.

  • Pay more than the minimum. Go over your budget with a fine-toothed comb, looking for any expenses that can be trimmed. For example, can you do without a streaming service or two? How long has it been since you've shopped for new homeowners or auto insurance? Switching can save you money each month. The point is to find as many small savings as you can and divert those payments to your debt.
  • Pick up a new debt strategy. Because you're not the first person who's been in debt (and won't be the last), there are several debt strategies out there designed to help you systematically cut debt from your life. They're called things like "debt snowball" and "debt avalanche," and they work.
  • Use "found money." Commit to putting every tax refund, bonus, and birthday check toward the debt.
  • Sell what you can. If you're like most people, you probably have many things lying around your house that you no longer use. Sell them to raise enough to pay down a portion of the debt.
  • Settle for less. There's no rule that says you can't call a creditor and negotiate to pay a debt for less than you owe. Get everything in writing first, and know that settling for less than owed will hit your credit report hard. But if your credit score is already shot, it's worth considering.

Debt consolidation

If your credit score is still relatively strong, you may be able to take out a large enough debt consolidation loan to pay off all your outstanding debt at once. If you're a credit union member, that would be a great place to start. If not, there are plenty of online lenders that deal with debt consolidation. Ideally, you'll land an interest rate that's lower than the average rate you're paying on your current debt and will save money in interest. The challenge once you've taken out a consolidation loan is to avoid taking on any new credit.

Non-profit credit counseling

There's no reason to go it alone. A non-profit credit counseling agency can help you do everything from creating a realistic budget to eliminating late fees, stopping collection calls, and lowering interest rates. The National Foundation for Credit Counseling (NFCC) has been around since 1951 and can help you find a nonprofit that will work on your behalf. If you do go this route, make sure to ask questions, including how participation may impact your credit score -- for better or worse.

As bad as it feels, debt overload does not have to be a permanent condition. Find a plan that works for you, believe in yourself, and as you whittle away at debt, begin to plan for a brighter financial future.

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