--- title: Avoiding debt cycle traps description: Read about what a debt cycle is and how to avoid it when building your credit. image: https://theplinq.plinqit.com/hubfs/The%20Plinq%20Photos/man%20on%20computer%20looking%20at%20bills.png --- May 11, 2022 # Avoiding debt cycle traps ![Picture of Mollie Macklin](https://theplinq.plinqit.com/hs-fs/hubfs/Mollie_image_circle.png?width=50&name=Mollie_image_circle.png) [ Mollie Macklin ](https://theplinq.plinqit.com/author/mollie-macklin) Share: [facebook-f icon ](http://www.facebook.com/share.php?u=https://theplinq.plinqit.com/avoiding-debt-cycle-traps) [linkedin-in icon ](http://www.linkedin.com/shareArticle?mini=true&url=https://theplinq.plinqit.com/avoiding-debt-cycle-traps) [Twitter icon ](https://twitter.com/intent/tweet?url=https://theplinq.plinqit.com/avoiding-debt-cycle-traps) [pinterest-p icon ](http://pinterest.com/pin/create/link/?url=https://theplinq.plinqit.com/avoiding-debt-cycle-traps) [envelope icon ](mailto:?body=https://theplinq.plinqit.com/avoiding-debt-cycle-traps) ###### Read about what a debt cycle is and how to avoid it when building your credit. --- ![man on computer looking at bills](https://theplinq.plinqit.com/hs-fs/hubfs/The%20Plinq%20Photos/man%20on%20computer%20looking%20at%20bills.png?width=450&name=man%20on%20computer%20looking%20at%20bills.png)For many, using credit to secure a home or reliable transportation may seem like the only way you can establish yourself. If you find yourself toying with the idea of using credit to make a big life decision, make sure you’re aware of what a debt cycle trap is and how to avoid it.  A debt cycle is continuing to use borrowed money to pay off debt. Think of an avalanche, it starts small but as it rolls down the hill, it grabs everything in its path. That’s exactly what debt does. The more money you borrow, the more your debt will grow if you do not pay it off fast enough. Which is why it’s important to keep debt to a minimum so you’re not playing a game of constant catch up with an avalanche, trapping you in a debt cycle. Here are some tips to keep you out of a debt cycle trap: Understand your finances Make a realistic budget, to include what you have coming in and coming out. If you’re currently paying off your last big credit purchase (like a car, for example), hold off. Wait until your current debt is wiped out before you even consider picking up another form of debt. This is the most common cause of debt traps. Focus on saving In a world full of “buy now, pay later” programs, it can be enticing to consider using one. However, every time you “pay later,” it adds additional money onto your debt with interest and fees. A better route would be to start a savings account, or saving funds (using an app like [Plinqit](https://hubs.ly/Q01d83TS0)), for certain high-priced items. It may seem like a waiting game, but it’s nothing compared to the waiting game of trying to pay off debt that you can’t afford. Remember: Save *now*, buy *later*. Avoid credit cards While using credit for things like a home or a car, or even paying for college, have the ability to elevate your lifestyle and capital quite a bit, credit cards often serve as a temptation more than anything. Using credit to build yourself a life is not the same as using credit to buy things you just desire to have. Train yourself to think of credit as a last resort, utilizing savings programs so you always keep yourself in the positive. Credit can be enticing. But just know, whether you see it yet or not, the avalanche is coming. So, spend (and save) wisely so you aren’t caught off guard when it sets in.  --- Posted by ![](https://theplinq.plinqit.com/hs-fs/hubfs/Mollie_image_circle.png?width=160&name=Mollie_image_circle.png) Mollie Macklin is a content contributor for The Plinq. Mollie believes knowledge is power and enjoys creating valuable content for young adults navigating big financial decisions to help them create the lifestyle that makes them happy. Mollie also enjoys funny movies, traveling with her boyfriend, playing her Nintendo Switch, and hanging out with her cats in her free time. 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