It’s great when your “numbers” surpass that of your peers, but not when the numbers tally the amount of debt you have. A recent article by wallstcheatsheet explains how massive debt is akin to being in financial quicksand. While most people need to establish credit, you don’t need to carry a balance to have a good credit score. When it comes to credit card debt, it is difficult to know whether you have too much debt. By receiving credit counseling, you can get that reality check you need to improve your personal finances. If you discover you are carrying too much debt, consider debt consolidation to more easily knock out your debt once and for all.

You have above-average debt

When you compare yourself to other people your age, it is a positive sign if you have less debt than the average. Experts say the average consumer debt is about $28,000, reports wallstcheatsheet. Meanwhile, the average person in the U.S. carries 2.18 credit cards in addition to about one and a half retail credit cards. If you break it down according to age, the average credit card balance for a millennial in their 20s is about $2,600 compared to about $5,300 for Generation X in their 40s and baby boomers in their 50s and 60s. Senior citizens have an average credit card balance of about $3,000.

You have a poor debt-to-income ratio

Most people learn about their debt-to-income ratio when they go to apply for a mortgage loan. You can figure out your debt-to-income ratio on your own as a way to gauge whether you have too much credit card debt. By going through a debt consolidation program, you make it a lot easier to get out of debt. Once you are out of debt, your ratio dramatically improves as long as you maintain a steady income. According to wallstcheatsheet, it is ideal to have a ratio of 28 percent. Simply add up your debts and then divide your debt total by your income for the month. Experts say it is difficult to qualify for a mortgage if your debt-to-income level is above 43 percent.

You have a low net worth

If you have a negative net worth, it means you owe more than all of your assets including a car, jewelry, clothing, home or money in savings or retirement. If your net worth is negative or in the low territory, you will benefit from debt consolidation. Experts say you can calculate your net worth by adding up everything you own and subtracting all of your credit card, mortgage and other debt. If you are upside down on your mortgage, your home is a liability rather than an asset. A report by the Federal Reserve shows people younger than 35 have a net worth of about $10,400, while people 35 to 45 have a net worth of about $46,000. People age 55 to 64 have a net worth of about $165,000.

At Christian Credit Counselors, we have trained and accredited credit counselors who don’t judge your situation. They can help you get on a Debt Management Plan so you knock out debt before it damages your future.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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