Home / Top News / Red flags that your spending is out of control

Red flags that your spending is out of control


Most people carry some debt, but knowing when it’s getting out of control is another matter.

While everyone’s financial situation is different, there are some tell-tale signs that you may be at risk of defaulting on your loans and credit card payments, says Leslie Tayne, founder and head attorney at Tayne Law Group.

Tayne and her team have resolved tens of thousands of debt cases over the past two decades. Over that time, she’s picked up on several red flags that you may be in over your head with debt. Here are five to watch out for.

1. 50% of your gross income is spent on housing

2. You’ve been rejected for balance transfers

A balance transfer allows you to move your debt from one credit card to another. To entice new customers to switch cards, many banks offer 0% interest for a period of time — usually 12 to 21 months — if you switch to their card. 

While 0% interest balance transfers offer temporary financial relief for borrowers, not every borrower qualifies. If you either have a low credit score or existing credit card debt that exceeds the credit limit of the new card, it’s possible that a bank will deny a bank transfer.

Being rejected for balance transfers suggests that your debt situation is already a problem that needs to be addressed, says Tayne. 

3. You have more than 10 credit cards

Ideally, credit cards should be used for purchases that can be paid off right away, since the interest is typically high.

Trying to balance too many cards at once — especially if they all carry balances — can be a sign that there’s “a challenge with spending and an inability to then keep up with bill paying,” Tayne says.

In her experience, clients with more than 10 cards tend to struggle to pay their bills.

“Anything above 10 credit cards can suggest that a lot is going on,” says Tayne. Most Americans have about four credit cards. 

4. You hide expenses from your spouse or partner

Hiding expenses from a partner or spouse can lead to financial trouble. “It’s very common for me to have one spouse come in and say the other spouse does not know what’s happening,” says Tayne. 

Often, the client wants “to protect the spouse or significant other, or they’re ashamed,” which can lead to avoiding the problem altogether, says Tayne.

These situations may start small, but often “spiral out of control,” making debt problems worse than they need to be, she says. 

5. You don’t know how much debt you have

Inside a 95-square-foot NYC apartment renting for $1,100/month

About admin

Check Also

How yelling at kids affects their happiness, success

Almost every parent yells at their child eventually, no matter how hard they try to …