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Expert opinion: 4 warning signs you’re living in debt denial

By: Ambareen Musa, Founder & CEO of

Are your piling debts giving you sleepless nights? Stress can trigger denial when instead you should be facing the ugly truth of how much you owe your lender. Before your finances spin out of control, understand the signs of debt denial and why it is important to take a reality check – now!

Good financial health is an important part of your wellbeing. The struggle with debt can wreak havoc on your psyche infiltrating all aspects of your life. To counter this emotional anxiety, many choose denial as a coping mechanism.

Choosing to ignore your debts can be a huge barrier to your financial recovery, not to mention expensive. The longer you stay in denial, the more debt you accumulate.

Taking ownership of your situation, however unsettling, is the first step towards a secure financial future. Following are the red flags to watch out for before debt denial leads you to financial ruin, and our tips on how to deal with these circumstances.

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Your Credit Cards Are Maxed Out

Your credit card comes with a spending limit. Maxed out credit limit signals living outside of your means. If you use credit cards for essential everyday spends like utilities and groceries or carry revolving debt, you may be in a fix.

Utilizing the entire credit limit is not only expensive, it is also harmful to your credit score. When you exceed your spending limit, you risk being charged an over-the-limit fee as well as penalty interest.

To prevent maxed-out balances, aim to settle your credit card bill in full and on time each month.

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You Only Make Minimum Payments Towards Debts

If you make only the minimum payment on your credit cards or other loans every month, you keep racking up interest on the unpaid balance.

Credit card providers give you the option to revolve your debt or carry over your balance to the next month, making only the minimum payment now. This is where they make most of their money – with the interest paid on the outstanding amount. In the UAE, where credit cards are issued at almost 40 percent APR, debts can accumulate at a rapid pace. At such a high interest rate, it may take months or even years to gain control over the principal amount.

If paying off the full amount every month seems difficult now, aim to pay as much as possible prioritizing high-interest debts to save on interest.

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You Have Unpaid Bills, Hidden Away

A big warning sign of debt denial is refusing to acknowledge the inevitable – all bills have to be paid. Sweeping it under the rug or counting on a stroke of good luck to get you out of your situation is not the solution.

The best way to deal with your bills is to gain control over them. This is where budgeting comes into play. Try to work out a payment plan that will be easy on your pocket but help you eventually pay your bills off.

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Regardless of Financial Problems, You Make No Changes to Your Lifestyle

Not making any real effort to slow down your spending or increase the amount paid towards debts despite financial difficulties signals living in denial.

It should be understood that to get a foothold on your financial problems, you need a proactive approach. You can consider strict budgeting, sell some assets or apply for a debt consolidation loan to pay off all your debts at a lower interest rate.

 It all boils down to dealing with your debt situation head-on Evading your financial concerns will only make matters worse. The only feasible solution is to identify the magnitude of your debt situation and take prompt action to remedy it.