As a general rule of thumb, your debt repayments, including those on your credit card,
should not exceed 40-50% of your take-home pay. If it does, you could be headed towards that danger zone where it is very difficult to rein in your debt.
If you're unsure that this may be happening to you, here are some warnings signs.
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Regularly spending beyond your budget |
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Living from payday to payday |
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Being unable to meet large one-off expenses like household insurance |
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Always paying only the minimum repayments on your credit card bill each month |
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Not knowing how much your total debt is |
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Being near, or at, your credit card limit – especially if you have more than one card |
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Consistently paying bills late |
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Hiding your debt situation from your spouse or partner |
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If two or more apply to you, it could be time to cut back on your spending and reduce your debt. |
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Budgeting Basics