card balance: $2,900. Her monthly minimum payments aren't too bad and she's able to cover her expenses, but needs to start getting paid before she can really make a significant impact on her debt.

She's a smart, frugal consumer, but still needs to buy some necessities (and maybe a few non-necessities) for the new pad. She's been told that she shouldn't let her credit card balances go over 50% of the limits, her current credit limit is $6,000, so she opens another credit card account for her household items; she has a 740 credit score and has no trouble opening a 0% intro APR credit card account and charges $1,500

Think you have your finances under control; you may be a lot closer to bankruptcy than you may think. It's incredibly important that you understand credit and how it can affect you; a lot of people learn this secret about debt at some point, unfortunately, it's usually too late by the time that happens. Listen, not many of us ignore our finances because we have money to throw out the window, and because of this we need to take a proactive approach to our finances before they take control of us.

A little bit of debt is fine, it's actually a good thing, but it can easily get away from you and spiral out of control, and this spiral can begin a whole lot sooner than you may think, even if you don't have a lot of it. A quick example should suffice to drive home this point.

Kelly is 23, she's graduating from college and soon she'll be ready to take the plunge into the job market. Even though she managed her finances well and had a full-time job throughout college, she still racked up $25,000 in student loan debt. She calculated what her payments would be and found that, as long as she got a job relatively quick, she shouldn't have a problem making the low monthly payments on her student loans. She only opened a credit card so that she'd have access to funds in case of an emergency; although she used the card through college, she managed to pay off the balance every month.

Kelly was recently offered her dream job in Southern California, but it's a long way from her home in Ohio. She decides to accept the offer because, although she may have to charge some moving expenses, she'll be able to pay the balance off in time with the salary her company offered.

She moves back home after college as she isn't scheduled to start her new job for a couple months. She's unable to find a job to hold her over for those couple months because she's only available for such a short time. She's not too worried about it because she doesn’t have a whole lot of expenses and she can sell some of her old college books to hold her over. Two months later, moving day has arrived, but she doesn't have enough to cover all the expenses; out comes the charge card. She manages to make the move across country charging only $1,000 to her credit card.

She has some other expenses to take care of when she arrives in California; she needs a deposit and first month's rent for an apartment and gets a cash advance on her credit card to cover that; a total of $1,900. Total credit card balance: $2,900. Her monthly minimum payments aren't too bad and she's able to cover her expenses, but needs to start getting paid before she can really make a significant impact on her debt.

She's a smart, frugal consumer, but still needs to buy some necessities (and maybe a few non-necessities) for the new pad. She's been told that she shouldn't let her credit card balances go over 50% of the limits, her current credit limit is $6,000, so she opens another credit card account for her household items; she has a 740 credit score and has no trouble opening a 0% intro APR credit card account and charges $1,500

and this spiral can begin a whole lot sooner than you may think, even if you don't have a lot of it. A quick example should suffice to drive home this point.

Kelly is 23, she's graduating from college and soon she'll be ready to take the plunge into the job market. Even though she managed her finances well and had a full-time job throughout college, she still racked up $25,000 in student loan debt. She calculated what her payments would be and found that, as long as she got a job relatively quick, she shouldn't have a problem making the low monthly payments on her student loans. She only opened a credit card so that she'd have access to funds in case of an emergency; although she used the card through college, she managed to pay off the balance every month.

Kelly was recently offered her dream job in Southern California, but it's a long way from her home in Ohio. She decides to accept the offer because, although she may have to charge some moving expenses, she'll be able to pay the balance off in time with the salary her company offered.

She moves back home after college as she isn't scheduled to start her new job for a couple months. She's unable to find a job to hold her over for those couple months because she's only available for such a short time. She's not too worried about it because she doesn’t have a whole lot of expenses and she can sell some of her old college books to hold her over. Two months later, moving day has arrived, but she doesn't have enough to cover all the expenses; out comes the charge card. She manages to make the move across country charging only $1,000 to her credit card.

She has some other expenses to take care of when she arrives in California; she needs a deposit and first month's rent for an apartment and gets a cash advance on her credit card to cover that; a total of $1,900. Total credit card balance: $2,900. Her monthly minimum payments aren't too bad and she's able to cover her expenses, but needs to start getting paid before she can really make a significant impact on her debt.

She's a smart, frugal consumer, but still needs to buy some necessities (and maybe a few non-necessities) for the new pad. She's been told that she shouldn't let her credit card balances go over 50% of the limits, her current credit limit is $6,000, so she opens another credit card account for her household items; she has a 740 credit score and has no trouble opening a 0% intro APR credit card account and charges $1,500

that she'd have access to funds in case of an emergency; although she used the card through college, she managed to pay off the balance every month.

Kelly was recently offered her dream job in Southern California, but it's a long way from her home in Ohio. She decides to accept the offer because, although she may have to charge some moving expenses, she'll be able to pay the balance off in time with the salary her company offered.

She moves back home after college as she isn't scheduled to start her new job for a couple months. She's unable to find a job to hold her over for those couple months because she's only available for such a short time. She's not too worried about it because she doesn’t have a whole lot of expenses and she can sell some of her old college books to hold her over. Two months later, moving day has arrived, but she doesn't have enough to cover all the expenses; out comes the charge card. She manages to make the move across country charging only $1,000 to her credit card.

She has some other expenses to take care of when she arrives in California; she needs a deposit and first month's rent for an apartment and gets a cash advance on her credit card to cover that; a total of $1,900. Total credit card balance: $2,900. Her monthly minimum payments aren't too bad and she's able to cover her expenses, but needs to start getting paid before she can really make a significant impact on her debt.

She's a smart, frugal consumer, but still needs to buy some necessities (and maybe a few non-necessities) for the new pad. She's been told that she shouldn't let her credit card balances go over 50% of the limits, her current credit limit is $6,000, so she opens another credit card account for her household items; she has a 740 credit score and has no trouble opening a 0% intro APR credit card account and charges $1,500

s only available for such a short time. She's not too worried about it because she doesn’t have a whole lot of expenses and she can sell some of her old college books to hold her over. Two months later, moving day has arrived, but she doesn't have enough to cover all the expenses; out comes the charge card. She manages to make the move across country charging only $1,000 to her credit card.

She has some other expenses to take care of when she arrives in California; she needs a deposit and first month's rent for an apartment and gets a cash advance on her credit card to cover that; a total of $1,900. Total credit card balance: $2,900. Her monthly minimum payments aren't too bad and she's able to cover her expenses, but needs to start getting paid before she can really make a significant impact on her debt.

She's a smart, frugal consumer, but still needs to buy some necessities (and maybe a few non-necessities) for the new pad. She's been told that she shouldn't let her credit card balances go over 50% of the limits, her current credit limit is $6,000, so she opens another credit card account for her household items; she has a 740 credit score and has no trouble opening a 0% intro APR credit card account and charges $1,500

card balance: $2,900. Her monthly minimum payments aren't too bad and she's able to cover her expenses, but needs to start getting paid before she can really make a significant impact on her debt.

She's a smart, frugal consumer, but still needs to buy some necessities (and maybe a few non-necessities) for the new pad. She's been told that she shouldn't let her credit card balances go over 50% of the limits, her current credit limit is $6,000, so she opens another credit card account for her household items; she has a 740 credit score and has no trouble opening a 0% intro APR credit card account and charges $1,500. Total credit card balance: $4,400. Unfortunately the car she's owned for years now craps out on her and she has to buy a new one; she gets an $8,000 auto loan for a reasonably priced, reliable ride to work.

Although her monthly payments have gone up significantly since before she moved to California, she's bringing home $3,000 a month after taxes and isn't having a whole lot of trouble making extra payments on all of her debts.

Six months later things take a turn for the worse, the market takes a nose dive and her company makes cuts to try and stay afloat; unfortunately that leaves her jobless. She's managed to pay her credit card balances down to $1,500, but hasn't saved any money for a rainy day, and it's getting pretty wet out there. Kelly has to charge her living expenses, including her rent, until she finds another job. Since the market turned, none of the companies in Kelly's industry are hiring, and it takes her 3 months just to secure an average job at an average company; three month's worth of living expenses go onto the credit card. Although she got her credit card balances down to $1,500, she's now racked up $5,900 to cover three months' living expenses. Kelly's now at about 40% of her limit on her first card and over 50% on her 0% intro APR card and her credit score drops to 700 because of this. With all the madness of searching for a new job and trying to get her bills paid, she forgets to pay her 0% APR credit card bill and she receives a notification that they've canceled her introductory period and raised the interest rate to 20%. In light of the missed payment and her lower score, the company re-evaluates her credit limit and lowers it to $3,000, bringing her balance to 100% of the limit; her credit score drops again to 680 as a result.

She makes a lot less at her new company than before and, although her new paycheck's covering the bills, she doesn't have anything left over. Kelly's always been someone to plan ahead and, being in the precarious situation she's in now, decides to go for a personal loan from her bank to hold her over until she's able to get back on her feet again. The bank denies her; her credit score's dropped to 680, she's got a late credit card payment on her record, and her overall credit balance is only $1,000 from the limit.

Murphy's law always rears its ugly head at the worst time and this case is no different; her car breaks down on the way to work one day. The repairs are going to cost $1,000