Do You Have a Debt Problem? Take This Quiz and Find Out

Credit cards are a normal part of daily life in America. And so, too, is credit card debt. The average American household is carrying a monthly balance of about $6,000 on their credit cards, according to NerdWallet's 2021 American Household Credit Card Debt Study. And since just 41 percent of Americans pay their credit card bills in full each month, we know that many are carrying monthly balances greater than $6,000.

But what, exactly, indicates when carrying debt is a serious problem that is derailing your financial stability, rather than just an expensive habit? Turns out there are reliable indicators that can let you know if you're in the danger zone. Keep count of all the statements you read below for which you answer TRUE, to learn if you're in that zone.

Worrisome Signs You Might Have a Debt Problem:

  1. You find yourself wondering often if you have a debt problem.
  2. You make only minimum payments on your credit cards each month out of financial necessity (you can't pay more than that).
  3. Your debt-to-income (DTI) ratio is higher than 35%, meaning the percentage of your income that goes to paying existing debts is higher than 35%. To figure out your DTI ratio, take the $$ you spend monthly paying debts, and divide by your monthly gross income (before taxes and benefits, etc.).
  4. You pay some of your bills late or skip payments because you don't have enough money to pay them.
  5. Your credit utilization is over 30%. Credit utilization refers to the percentage of your available credit you are using, so if you have $10,000 credit, and are carrying balances of $3,000, you are using 30% of your credit.
  6. More than half of the credit cards you own are maxed out.
  7. You have been denied new cards you applied for.
  8. You don't know how much you owe in total.
  9. You don't know how much you owe/pay each month in total monthly minimum payments.
  10. You find yourself spending impulsively, partly because it helps you avoid thinking about your debt.
  11. More than 20 percent of your take-home pay is going to pay off credit cards.
  12. You use credit cards to pay for the necessities of living, such as groceries and gas.

Urgent Signs You Might Have a Debt Problem:

  1. Your DTI (see above) is 50 percent or higher.
  2. Your credit utilization is over 50%, meaning you are carrying debt on your cards equal to half or more of your total available credit.
  3. You routinely tap cash advance on your cards.
  4. You use balance-transfer offers as a way to give yourself breathing room (and maybe gain a little more credit to use), not to pay off high-interest debt.
  5. Avoidance: you've stopped opening bills.
  6. You hide your spending and/or your debts from a partner.
  7. You make either late or partial payments to your creditors.
  8. You use payday loans to help bridge your cash flow problem.
  9. Debt collectors are calling you.
  10. You find it difficult to sleep at night, due to the financial stress you are under.


Section 1: Give yourself 1 point for every True answer in Section 1. If you answered True to more than FOUR of these statements, you should consider getting a professional analysis of your debt. Unless you come into a sudden cash windfall that you can direct toward paying down your debt, you are likely on a path that makes paying off your debt, without any modifications to that debt, extremely difficult.

Give your monthly budget a hard look and see what you can cut to reduce your expenses. Consider eliminating cable, a second car, even your cell phone for six months, to find money you can use to help reduce your debt. If you can't carve out more money in your budget to pay down debt, consider reaching out to a professional for a debt analysis.

Section 2: If you answered True to any TWO of these statements, you are most likely in a debt situation that needs to be addressed as soon as possible. Indicators show that you likely do not have sufficient income to begin to attack and pay down your debt in any significant way on your own, and that you are unlikely to qualify for a debt consolidation loan. Paying only minimums will not move you forward.

The bottom line is this: people from every age group, at every income level, and in every state find themselves in overwhelming debt, for any number of reasons. So if you're struggling with debt, don't layer on feelings of guilt or shame. Instead, focus on the fact that debt can be temporary — even though it takes time to resolve it — and learn more about how to make a plan to get your debt under control. You can start working toward your debt-free life, today!