(see also What Is Debt Load?,  Warning Signs of Too Much Debt, How Much Debt Is Too Much)

VISA International Service Association says:

Understanding your current debt load. Debt load is a term that is used to describe the amount of debt a consumer has. It is often used to understand if you are carrying a "safe" amount of credit.

Creditors look at a debt/income ratio, comparing your income with your outgo to analyze whether you have too much debt. The debt/income ratio is figured monthly, and reveals either how good, or bad, your financial picture is on a day-to-day basis.

You can figure this ratio for yourself! Add all of your non-housing monthly payments except for your utilities or taxes, and then compare that total with your total gross annual wages divided by 12. If you don't have fixed monthly payments on revolving debts such as credit cards, you can estimate your monthly payments at 4% of the total amount you owe. When you divide your monthly debt payments by your total monthly income, you will get your monthly non-housing debt/income ratio. It is usually expressed as a percentage so move the decimal point two places to the right. Here's an example: Gross monthly income is $2,000 Monthly debt is $500 (credit card payments, gasoline bills, and car payments) $500/$2000 = 25% Your debt/income ratio is 25%

Here's a comfortable rule of thumb to follow: If your non-housing debt is 10% or less you're in great financial fitness If your non-housing debt is between 10% - 20%, then you'll probably be able to get credit, but as you approach 20%, you're getting too high! Another conservative rule of thumb for other consumer credit, not counting a house payment, is called the 20-10 rule. This means that total household debt (not including house payments) shouldn't exceed 20% of your net household income. (Your net income is how much you actually "bring home" after taxes in your paycheck.) Ideally, monthly payments shouldn't exceed 10% of the NET amount you bring home. For example, if you bring home $60,000 per year, your total consumer debt shouldn't exceed $12,000 and total monthly payments shouldn't exceed $500 per month.

There have been many attempts to devise formulas for setting limits on the amount of real estate debt one should carry. One rule of thumb is 2 (or 2 ½ to 3) times your annual income. If the annual household income is $70,000, a mortgage company might loan up to $210,000 provided the house is worth the money and the other credit factors are satisfactory. However, be careful. Just because a lender may be willing to extend credit doesn't mean that you should necessarily borrow that amount. You should also factor in your own specific fixed and variable expenses to determine your own ability to pay. How much you spend on real estate may depend on what area of the country you live in. Remember, if you're high on the real estate debt, you may want to be lower on the debt/income ratio to compensate. Here's another rule that is used by mortgage lenders - the "28/36 rule". Your monthly household debt service should not exceed 28% of your gross monthly income.  Your total debt service, including your house payments plus all other payments, should not exceed 36% of your gross monthly income.

In determining your own debt load limits, you can start with the rules of thumb described above, but you also need to consider: The stability of your income Your other regular expenses Your need for cash from month to month The changes in your cash needs as you and your household grows older All you personal needs and wants and goals Any extraordinary expenses you might have which would affect the standard rules, such as caring for sick family members, or special medical needs. Remember that your debt SPENDS your future income. And you have less money now to do things you want to do because you must pay for items you've already bought, and in many cases, already discarded. Begin the habit of regular savings. It's much cheaper to save for an item first than to buy it on credit. Keep your future debt load reasonable.

It's hard to admit when you're having a problem with debt. It is natural. Debt can be painful. Here are some things that might indicate you're headed for trouble. Next month's bills are here before you've paid last months. You get frustrated when you start to write checks. There are more bills than you thought. You know what past-due notices look like. You get an overdue balance on a credit card statement. You avoid opening letters. You rarely keep a running balance in your checkbook.

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(see also What Is Debt Load?,  Warning Signs of Too Much Debt, How Much Debt Is Too Much)