5 Debt-Driving Habits to Avoid

Good debt or bad debt, borrowing money has its consequences.

But at least with so-called good debt (i.e. buying an affordable home, going to college), you stand a good chance of getting a better financial deal coming out than you did going in.

Not so much with bad debt, which, once triggered, can snowball over time and threaten to haunt borrowers for years – even decades.

It wasn’t always so. Back in 1957, the total U.S. national debt was only $4.8 trillion. By the end of 2007, that number had risen to $53 trillion, according to the Federal Reserve’s National Debt Report. That amounts to about $175,000 in debt for every single American. Furthermore, more than 85% of all American consumer debt was created since 1990, the Fed report adds.

On an individual level, we, as a nation, are no pikers when it comes to accumulating debt. The Federal Reserve says that individual U.S. consumer debt amounted to $2.5 trillion in 2008.

No doubt that much of that debt is the aforementioned "good debt." But what about the bad stuff? How much of that debt was related to “bad debt” for products and services consumers could have easily gone without?

Let’s take a look at some of the worst ways we accumulate debt. Try these five dopey debt-enhancers for starters:

Cash advances on credit cards
. Taking cash from your credit card is the debt equivalent of tossing gasoline into a bonfire. Aside from the high interest rates linked to card cash advances, and onerous “administrative” fees, you’re raising your credit limit, which will hurt your credit score.