There are many types of debt today but none has reached the point of being an epidemic like credit card debt. People in debt live under a heavy weight and tons of stress. That is why the public has been seeking advice and educating themselves about not just getting out of debt but how to avoid it altogether.

Here are a few types of common debt that people deal with today:

  • Credit Card Debt
  • Medical Debt
  • Student Loans

and we will discuss each one in detail. The best way to handle debt is to avoid it to begin with. That means knowing what your options are and taking advantage of them.

Credit Card Debt

This type of debt is prevalent all across the globe. Debt collectors do a huge business in the credit card business. These are ‘unsecured’ debts without collateral. Whenever people default on credit card debts then creditors will hire a law firm or debt collection agency to collect what is owed.

The high interest rates are what end up putting many people in debt with these credit cards. The best way to avoid credit card debt is to use them properly. Impulse buying is what has landed many people into debt and into the poor house. They mismanage the convenience given by credit cards.

One very effective tool for avoiding credit card debt is to have a reasonable sized emergency fund. Sometimes credit card debt happens because of an unexpected medical expense or home or car repair. With a decent emergency fund they would not need to resort to putting those expenses onto a credit card.

They should also

  • Never Miss Credit Card Payments
  • Avoid Balance Transfers
  • Avoid Cash Advances
  • Pay The Full Balance Every Month

These practices will help to avoid accumulating credit card debt.

Medical Debt

Illness and injury can happen to anyone at any time. It can really take a toll on finances. Even with insurance it is very rare that all these expenses are paid solely by the insurance coverage. Many of these expensed wind up being turned over to the debt collection agencies.

One way of avoiding medical debt is to locate some ‘catastrophic’ health insurance. The ever-rising costs for insurance have put it out of range for lots of people. However, the premiums on catastrophic insurance are a little more affordable than standard health insurance plans.

These plans are called HDHP (high deductible health plans) due to their high deductibles which can add up to several thousand dollars. While they are not such good help with things like checkups, if you suffer a major injury or illness they can keep you from going bankrupt over medical debt.

People should also speak with their providers directly and negotiate payments. Most providers are willing to set up a payment plan to fit most budgets.

Student Loan Debt

This type of debt has also reached epidemic proportions. It has actually surpassed credit card defaults in the U. S.

The best way to avoid student loan debt is to begin saving early. Then load up on all available scholarships. Search for grants and take on internships. These are effective ways to combat student loan debt.