Debt can have a sneaky way of not appearing to be a problem until it’s a huge problem. Don’t let it happen to you! Here you’ll find a list of unexpected debt traps, as well as ways to avoid falling into them.  After all, the best debt solution is to avoid going into it in the first place.

The divide and conquer payment plan

Rather than sending an equal amount of money to all your creditors each month, start sending the majority to one until you pay off your balance. You’ll see the results more quickly and eventually decrease your overall monthly interest as you eliminate your creditors one at a time. In the meantime, be sure to keep up the minimum payments on your other bills to avoid late fees.

Dipping into your 401(K)

If you have to borrow money, you might as well lend it to yourself, right? Not necessarily. While tax-exempt 401K loans can be tempting, they aren’t without risks. Unless you can pay back the loan within 60 days, expect to be not only taxed but possibly hit with early-withdrawal penalties.

Dipping into savings

Draining your savings account can also appear a tempting way to get out of debt fast. The risk here is encountering an unexpected emergency that may plunge you right back into debt overnight. Making sure you have a nest egg to cover unexpected bills and day to day expenses is a strategy that can pay off in the long run.

Not reading the fine print on 0% interest offers

Most creditors appeal to consumers with the promise of 0% interest that only lasts around 18 months. Make sure you read the fine print and understand what will happen if your balance isn’t paid in full by the end of the offer. Otherwise, you may risk getting hit with compound interest from all 18 prior months.

The brand new car trap

While many car companies promise easy monthly payments, almost all of them fail to mention long-term interest rates. Keep in mind that the second you drive a brand new car off the lot, it becomes “used.” Rather than commit to spending $20,000, why not look for a gently used car that could literally save you thousands?