Debt Warning Signs Everyone Should Be Aware Of

Debt Warning Signs Everyone Should Be Aware Of

Written by Priyanka Correia
Fact-checked by Caitlin Wood
Last Updated August 11, 2021

In Canada, the average consumer is approximately $23,760 in debt. While some consumers are great at managing it, others may have a difficult time due to poor financial literacy, low income, job loss or other reasons such as financial emergencies. Sometimes it’s easy to notice when your debt has gotten out of hand, but other times it can sneak up on you. With the convenience of credit cards and the plethora of credit options available, spending is made easy and debt accumulation even easier.

Seek Help Immediately if You Have Any of These 5 Debt Warning Signs

If you have one or more of these debt warning signs, you may need to seek professional help immediately.

Number 1. Your Debt Increases Each Month.

Does your debt continue to increase despite regular payments? This can happen when you continue to rely on different credit products such as a credit card or a line of credit for everyday purchases or when you use a cash advance to pay off your other debts. 

Number 2.  You’re Only Making the Minimum Payment.

While you may avoid any late fees, your balance stays the same and you end up accruing interest on top of interest. 

Learn more about how minimum payments work.

Number 3. Your Credit Cards are Maxed Out. 

If one or more of your credit cards are maxed out, that is a sign you’re struggling to manage your debt. Moreover, if you’ve been relying on payday loans and other high-interest credit products to keep up with your bills, you need to seek help immediately. 

Number 4. You Have No Savings.

If your debt payments have depleted your savings and continue to prevent you from putting money aside every month, that’s a serious sign that you need to seek the help of a professional.

Check out how to create an emergency fund.

Number 5: You’re Unable to Consolidate Your Debt

Debt consolidation is one of the most common ways to reduce your debt burden. However, if you’ve been rejected for a debt consolidation loan because your debt is too high, that could be a sign your debt is out of control. 

Bottom Line

If you have these debt warning signs, then seek help immediately. We recommend you speak with a debt specialist to consider your options. These specialists can evaluate your debt load, assess your finances, and provide you with the right debt relief solution to help you get back on the right track.


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Priyanka is a personal finance expert at Loans Canada. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives. She has taken financial control of her life by using Mint to budget and track her expenses while growing her wealth by investing through Wealthsimple. She also believes in having an emergency fund, so she keeps a good sum of money in an easily accessible high-interest savings account. She also uses the American Express Cobalt Card to earn points on all her purchases, further fueling her savings goal. She also uses Loans Canada’s lender directory whenever she wants to compare rates from different lenders.

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