MU Extension MU Extension       University of Missouri    ●    Columbia    ●    Kansas City       Rolla     ●    St. Louis - Money Matters - Consumer Action


Finance Quick Answers



How much debt is too much?

When it comes to credit - it’s important to know when to say when. Ask yourself these questions:

  • Do you have the financial capacity to repay the level of debt you are seeking on your credit card or through loans?
  • Do you have enough personal assets, such as real estate, stocks or bonds, to act as collateral for the size of the loan you want?
  • Do you pay your bills on time and are you living within your means? Creditors want to see a history of timely bill paying and know that you live within your means.
  • Have you kept your credit obligations affordable by limiting your total borrowing to less than 20 percent of your after-tax income. You can figure your discretionary spendable income by designing a budget listing your expenses and after-tax income.

Before accepting any new credit cards or asking for a credit limit increase, determine if you can afford it!


Source: "Keeping on top of your credit," USAA newsletter, July/Aug 97.




Written by:
Sandra McKinnon, Consumer & Family Economics Specialist, University of Missouri Extension

Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri Extension












Can't Find Your Question Here? Try Searching Our Quick Answer Knowledge Base

Last update: Monday, July 28, 2008




University of Missouri logo links to

Site Administrator: 
Copyright  ADA  Equal Opportunity

MissouriFamilies is produced by the College of Human Environmental Sciences,
Extension Division, University of Missouri-Columbia