The best way to avoid never-ending pressure from creditors to repay overdue bills is to not let the bills become overdue in the first place -- or better yet, to avoid getting into debt at all (to the extent possible). Even though credit cards, mortgage loans, and car payments are a virtual necessity in the lives of most consumers today, minimizing debt and avoiding overdue bills are in everyone's best interests. Following are some tips on avoiding debts and staying out of trouble with creditors.

Debt-Avoidance Tips

Some common-sense rules can help individuals avoid debt -- at least the level of debt that cannot be repaid when due:

• Pay with cash whenever possible.
• Stay within your spending limits.
• Avoid impulse purchases.
• Avoid "buy now, pay later," "interest-free financing" and like offers that merely postpone debt.
• Compare prices before making major purchases.
• Take only the cash with you that you can afford to spend while shopping, and spend only that cash.
• Avoid borrowing to finance "staple" purchases.
• If you cannot avoid borrowing, use the lender that offers the lowest interest rate.
• Avoid bank overdraft charges by keeping close tabs on bank balances.
• Keep a record of all credit card purchases.
• Always pay more than the minimum payment on credit card bills if possible.
• Avoid applying for more than one or two credit cards at a time.
• Consider transferring balances to a lower rate card, making sure the low rate applies to balance transfers.
• Avoid credit cards that charge interest from the date of purchase with no grace period as well as cards that charge interest immediately on a cash advance, plus charge a fee for each cash advance.

Avoid "Credit Scams"

Another way to avoid creating more debt is to watch out for credit repair or credit counseling scams. Everyday, companies appeal to consumers with poor credit histories -- promising, for a fee, to clean up their credit reports so they can get a car loan, a home mortgage, insurance, or even a job. The truth is, after consumers pay hundreds (even thousands) of dollars in up-front fees, these companies may do nothing to improve the debtors' credit reports, and, worse yet, many simply vanish with the unsuspecting consumers' money.

Thus, in many cases, the only ones who end up in better financial shape as a result of these "efforts" (or the lack thereof) are the counseling organizations themselves, while consumers are left with even fewer resources as a result of high fees and more delinquent debts.

Tips that can help consumers avoid credit scams include:

• Beware of promises that sound too good to be true.
• Deal with a reputable agency. Check with state consumer agencies and the local Better Business Bureau.
• As a general rule, non-profit credit counseling organizations are the best choices.
  • Verify that the organization provides counseling and education, as well as debt consolidation and payment services.
  • Carefully read through any written agreement that a credit counseling organization offers.
• Avoid paying up-front fees.
• Beware of any high fees or required contributions, like high monthly service charges, that may add to the overall debt load and defeat efforts to pay off bills.
• Confirm payments with creditors.

Related Resources

• Avoiding Debt: Credit Card Do's and Don'ts
• Ten Ways to Manage Expenses
• Do's and Don'ts: Making a Budget