10 Unexpected Debt Traps — and How to Avoid Them

Staying debt-free doesn’t seem that hard in theory. All you need to do is spend what you can afford, right? Well, the millions of Americans in debt would disagree. It is not that simple. Anyone can easily sink into debt if they don’t have the right attitude towards spending and money management.

Many people have the “buy now, pay later” mentality. If you don’t want to slide into the debt hole, here are 10 things you should avoid.

Paying Off Debt Using Savings

When you have a high-interest debt and some money in a low-earnings savings account, you may see it wise to pay off the debt with the money. But this strategy can blow off in your face. You will end up making things harder for yourself. You will not have any cash for emergencies. If you get an unexpected expense, you will be forced to borrow again to take care of it.

Splitting Cash for Bill Payment

Say you have an extra $600 and decide to send $200 to three creditors or $100 to six creditors. This is not as smart as it appears to be. Small payments will not make much of a difference. Focus on one debt at a time.

Subscription Plans

Most subscription plans don’t cost that much. So you sign up on a number of them. When you add all your plans up, you will see…