Top of main content

Avoid excessive borrowing

How to recognize the signs and what to do next

If you have debt, then you are not alone. The latest research by the Organisation for Co-operation and Economic Development (OECD) shows that household debt is growing in almost every country in the world. However, you can be in debt yet still be financially healthy. The key to debt is only to borrow what you can afford to pay back comfortably.

If you have debt, you’re not alone. In fact, the majority of Americans have debt. You can have debt and still be financially healthy. The key is not having more debt than you can manage.

What counts as excessive borrowing?

Excessive borrowing is any amount of debt that you can’t comfortably manage. There are several signs to look out for:

  1. Borrowing to cover everyday expenses
    One of the first signs that you may have a debt problem is if you need to borrow money to cover everyday expenses, like utility bills, food or travel costs. Rather than take out a short-term or payday loan, it may be helpful to admit that your budget is overstretched, and take steps to reduce your expenses.
  2. Repeated borrowing
    Borrowing money repeatedly, and on a regular basis, is another sign that you may have a debt problem. It’s a good idea to set yourself a budget, if you don’t already, so that you can plan ahead how you will meet your expenses.
  3. Minimum payments only
    If you have more than one credit card, and can only afford to make the minimum required payment on each, this may be another sign of excessive borrowing.
  4. Cash advances
    Using cash advances from credit cards to pay bills might seem like a manageable solution, but it’s another sign that you may have borrowed more money than you can comfortably afford to pay back.

Avoiding excessive borrowing can be difficult, especially if you are already struggling to meet your monthly expenses. If it feels like your debt is getting out of control, you should consider seeking specialist help from a free debt charity or related organization.

HSBC has created the YourMoneyCounts financial wellness program which is presented by HSBC staff to the community in a classroom setting. Participant workbooks covering Budgeting, Credit, and Identity Theft and a budgeting worksheet are found through the YourMoneyCount link above. This program was created in partnership with the national nonprofit Greenpath Financial Wellness,  and they provide free individualized support focused on your personal situation and financial wellness.