Top Causes Of Debt & How To Avoid Them

by Mike on June 24, 2017

Top Causes Of Debt & How To Avoid Them

We all know debt is a massive financial problem, but what causes it? Today, we look at the top causes of debt, and how you can avoid them.

Credit Cards

Make no mistake about it, credit cards can be a very valuable personal finance tool. But, they’re only positive when used correctly. The problem is, many people don’t use them correctly, and end up in debt. Issues occur when you use too much credit on your card and max it out each month. Then, you don’t pay the monthly bill in full, so it gets added to the next one with interest. This cycle keeps on repeating itself until you have too much debt to pay off.

Avoiding this cause is so simple, all you have to do is learn to use your credit card properly. Don’t max it out every month, just use it like it’s a normal debit card. Remember, you aren’t getting things for free, you’re basically delaying the payments until the end of the month. Always pay your bill in full too, so you avoid interest rates and additional fees.

Medical Bills

High medical bills can be a leading cause of debt for many people in this country. This is because medical treatment costs a lot, and we don’t have a good enough health care system to help us pay for it. So, many people go to the hospital and end up in debt thanks to huge bills.

How can you avoid this? In truth, you can’t avoid medical bills, they’ll always be around. But, what you can do is avoid getting in debt via them. One of the main things to consider is how you ended up in the hospital. Was it an accident that wasn’t your fault? If so, you can make a claim through a personal injury lawyer and get compensation to pay for your bills, alleviating any debt. Another good idea is to pay for medical insurance. It can help cover you when you end up in the hospital and ensures your bills are paid for, and your finances don’t take a hefty hit.


Higher education is probably the leading cause of debt in young people nowadays. The fact is, it costs a lot of money to go to college. You have tuition fees, and then you have loans to help you live away from home; it all adds up to thousands of dollars of debt.

To avoid this, you can try saving for college from an early age. If you have children, make a college fund for them, so there’s a decent amount of money at their disposal when they’re old enough to go to college. Students can also cut costs by trying to get scholarships or by living at home when they study.

It’s hard to avoid some causes of debt, but you can still try your best. Even if you don’t avoid debt completely, you can at least reduce the amount of debt you’re in, and make it easier to pay off. Having said that, you can definitely 100% avoid credit card debt, there’s really no excuse for ending up in it!



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