How much debt is just too much? A call to a consumer credit counseling service yielded this advice. Spending more than 15 percent to 20 percent of net income on monthly debt payments, not including your payments on a home mortgage, is just too much.

Easy availability of credit is partly to blame for many problems. Creditors are not the tight-fisted people they were years ago. It is common to receive several offers for credit cards each week in the mail. All you need to do is sign the offer and return it for instant credit. Potential creditors insure consumer credit with unparalleled leniency. After all, it’s hard for them not to make money with interest rates of 18 percent or more.

People who use credit cards as a receipt process and then pay their outstanding balance in full each month will avoid trouble. Credit card companies disguise potential debt problems. It is tough to spot trouble when the minimum monthly payment required reflects only 3-5 percent of the total balance. One can be dangerously in debt before any difficulties are noticed.

While it is illegal for creditors to send you unsolicited credit cards, they can increase the limits or lines of credit without asking. For people who have difficulty in controlling their spending habits, more credit means more debt, which means more trouble.

Your thoughts on this subject? Your comments appreciated!

Content © Rich Brott, 2011

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