How do you know when to call it quits on credit?


Life would be so much easier if there was a one-size-fits-all answer to this – but unfortunately, there isn’t one! We can’t give you a number. We can’t even give you a ballpark. What we can give you are ways to decide for yourself.


How much debt you can handle might depend on how much income you can put aside for repayments until it’s paid off. Or, it could depend on how you feel about credit: some of us don’t like owing anything – so even a small amount of debt can be stressful – while others are so relaxed that borrowing has to turn around and bite us before we realise it’s a problem!

Whichever camp you fall into, there are some crucial things to chew over before loading up on more debt.

1. Add up the total you owe (don’t include a mortgage or Student Loan). If it’s a fair chunk of your yearly income, or it just keeps on growing, it’s time to stop borrowing.

2. Is that purchase essential, and do you need it right now? Borrowing more to buy things you don’t need is a sure way to pay more than something’s worth: not only are you being ripped off, you’re brewing a sinkhole for the rest of your funds!

3. Will you have enough after monthly repayments to meet other household costs? Credit’s only a benefit if it’s in tune with the rest of your life.

4. Are you borrowing to pay off other debts? Get expert advice first.


Whether you take the prospect of more debt all in your stride or it has you running scared, get informed to stay on top of things from here. Our Money Manual can help you begin this journey:

  • Take a clear look at your finances: page 4
  • Get the rest of this section under your belt to see how debt stands with you: start with page 7
  • Formulate an exit plan if you need to: page 10
  • Make sure you know how credit works and how to get it for less: page 20

This article and much, much more can be found in our new Money Manual which can be purchased here!