Debt, it’s a four letter word for Americans. It is one of the biggest factors that can hold up your future. It will hold you up from buying a house, a car, and in some cases, it will prevent you from getting a job. There are some basic things to understand about debt, and what you can do to both prevent it from happening, and to eliminate it once you are already in debt.

1. The number one debt for Americans is Credit Card debt
Most American households have more than one member who holds a credit card. Most households will have at least one credit card, and the average debt on that card is over $9,000! Average interest rates are anywhere from the mid teens to the high teens at any time, obviously this is one debt you want to work to avoid.

2. There is such a thing as good debt
When you borrow for a home, or for a car, this can be considered good debt. You have to work to get the best rates, and be aware to not borrow more than you can afford. This is good debt because education can help you attain a much higher paying job, and owning a home is a great investment, as most of the time you will see your home gain value.

3. Most debt is bad.
As was mentioned, credit card debt is one that you want to avoid. Try not to use a credit card for things that are quickly consumed, and then you are finished. Things like meals, short trips, and paying overdue bills are all ways to fall into a quick debt trap. Save a little bit of cash each month for these things, so that you can pay your bills in full and not have to worry. If there is an item you really want, you can save cash for it, then use your credit card, which will allow you to keep up with the monthly payments without and hang-ups.

4. Control what comes out of that wallet!
People do all sorts of buying without ever even thinking about it. One good way is to write down everything you spend in a month, so that you can see it for yourself. You can then cut out items or services you don’t need, and use that money to save, or put it towards any debts you may have accrued.

5. Make your highest interest rate debts your number one priority
The most efficient way to get out of debt is to pay down the balances of the debts that are charging the most interest. The key to doing this though, is not falling behind on your other debts. Once your highest interest debt is paid down, move down the list to the debt with the next highest interest rate.

6. Avoid paying the minimum
If you only pay the minimum on your credit card debt, you will be barely covering the interest you have accrued for the month, and nothing will get put towards the actual principal. Paying this way would take years to pay off your full balance, and you will most likely spend much more that the original amount you owed.

7. Be careful what and where you borrow from
As easy as it is to borrow against the equity in your home, or pull money out of that 401(k) you should try and avoid it at all costs. Pulling money out will kill you with fee’s and in the long run may prevent you from meeting your retirement investing goals.

8. Always expect the unexpected.
Build yourself a little cash safety net. Save up a few months worth of living expenses in case of a sudden emergency. Without this, things like a broken water heater, a blown motor in your car or the need for a new computer will put a major dent in your wallet. These types of things that most people put on credit cards are big time contributors to debt.

9. Don’t rush to pay off your mortgage
Don’t put all you’re hard earned cash into trying to pay off your mortgage when you have other debts sitting around. Mortgages usually have lower interest rates than a credit card or other debts, and paying your normal monthly payment is fine, unless you can afford to pay all your debt for the month, and still have enough to make an extra mortgage payment.

10. Jump on your debt before your debt can jump on you
If you can’t manage the debts you currently have, then get help. There are many debt counseling and consolidation companies that can assist you in managing your money better and making it work for you, not against you.