Sneaky Debt

Some unexpected debt traps

You want to say out of debt, right? Well, it can be tricky. It’s not as easy as paying off your credit card every month. Here are some of the ways you can fall into debt without even realizing it, and some help avoiding those pitfalls.

  • Keeping Up With… Whomever. One of the easiest ways to fall into debt is trying to keep up with others. It’s hard not to be jealous of your neighbor’s new car. It’s fun to spend more on holiday gifts for the kids than you actually can afford. The best way to dodge this debt downfall is to be mindful of your spending. Why are you buying this item? What is the real motivation behind it? Ask yourself these questions and you’ll likely have more luck shutting down spending for the wrong reasons.
  • Subscriptions. Subscription services can be great, but they can also cost you big bucks long term. Low fees may mean you likely don’t think twice before signing up. However, if you’re signed up for 10 subscription services that charge $10 a month, you’re $100 in the hole just like that. Make sure you only sign up for services that you actually use. Each month, go over all your subscriptions and cut out the ones you haven’t used in more than one week. You likely won’t miss it.
  • Splitting payments. As US News reports, one common mistake when paying off debts is to split payments, for example paying $50 to each of your debtors per month. A better move is to pay down the debt with the highest interest rate, then move on down the line.
  • Long-term auto loans. The typical auto-loan is 36 months, but if you’re willing, lenders will also let you sign-up for an 84 month loan. That’s seven years, and could be way too long. You may end up owing more on the car is worth and be saddled with that debt. Explore your options carefully.
  • Chris O'Shea

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