by Paula Langguth Ryan
Most people completely ignore the first tell-tale sign of credit
addiction. They don't want to believe they have a problem and I don't blame
them. Most people think that as long as they're making their minimum payments on
time and they have a good credit rating that means their finances are in good
shape.
Want to know the first key sign of credit addiction? It's
carrying a balance on a credit card. Credit was designed as a matter of
convenience so you could make large purchases without running the risk of being
whacked on the head and robbed because you were carrying a large wad of cash.
Credit wasn't intended as a way to extend your earning power. Carrying a balance
is the first sign that you may have a serious underlying credit problem, much
like 2-3 drinks every night is a sign that someone may be a problem drinker.
You're not quite an addict yet, but it is time to check out the other key signs
to make sure.
Other Key Signs of Credit Addiction
If you are carrying a balance on any credit cards, look for
these other key signs of credit addiction.
1. Inability to go a week without charging. Take your credit
cards out of your wallet, stick them in a Ziploc bag, fill it with water, seal
it up and toss the bag in the freezer. Can you make it a week without trying to
thaw them out or does an "emergency" or "great deal" come up that requires you
to take on new debt? This goes for "buy now-pay later" or "extended payment"
offers too.
2. Taking cash advances off your credit cards or repeatedly
dipping into your overdraft protection. Both of these are major signals that
danger lays ahead. This is especially true if you're using that extra money to
pay for essentials - or to pay other creditors.
3. Making smaller and smaller monthly payments. We all start off
with good intentions of paying off our bills in full each month. Then we start
making payments of several hundred dollars a month to "pay off a chunk" of the
balance. Then one month we wake up and find that we're only making the minimum
payments. At this point, any change in expenses or income can send your
financial security into a tailspin.
4. Blaming "outer circumstances" for your need to take on debt.
A job loss, a sudden medical emergency, your transmission blowing, or the water
heater giving up the ghost are all unexpected events that we often use as
excuses for taking on new debt.
Any combination of these three should be a warning flag for you
to seek immediate help with your finances. As a first step to breaking the
addiction to credit, make a commitment to yourself that nothing will make you
take on any new debt today. Create a game plan for alternatives to taking on
debt, if an emergency comes up. Think outside the box.
Years ago, I owned a cottage by the Chesapeake Bay. One day, the
old well went dry and a new well was going to cost $6,000. Rather than take on
new debt, I asked neighbors if I could tap into their well for a few months. We
ran a garden hose from their pump house to mine hooked and I started saving fast
and furious until I was able to pay for the well.
Every day people share with me that they had good credit for
years before they suddenly found themselves unable to make ends meet each month
and eventually wound up in bankruptcy court. The truth is, they didn't have good
credit. They were just good at hiding their credit addiction. You may find it
helpful to hire a prosperity coach to help you figure out why you feel like what
you have isn't enough, why you're afraid of doing without, and to help you
create a strategy getting back on track financially.
Performance Coach and Prosperity Advisor Paula Langguth Ryan offers a free
30-page e-booklet titled Heal Your Relationship With Money. To get your free
downloadable copy, visit www.ArtOfAbundance.com/healing.htm