‘Prevention is better than cure.’ – We’ve all heard this proverb in various contexts, at some point in our lives. But in the context of personal finance, and debt to be more specific, this makes absolutely perfect sense.

Below, you’ll see a list of some familiar sounding scenarios that could easily land you in a pool of debt. Why not commit to staying away from such temptations and bad financial decisions, rather than regretting them at a later stage?

“I have a personal loan, but I’m still short of cash. What if I apply for a credit card and use that to meet my expenses?.. I have just enough to make the minimum payment every month.”

Worst decision ever! Why? Because you’re anyway struggling financially with an existing loan, and the interest on a credit card will be significantly higher than that loan. Did you know that the average annual interest rate (APR) on credit cards in the UAE is close to 40 percent? Making the minimum payments will never be enough, and you’ll end up with huge debt thanks to the accumulated interest. Soon you’ll find all your income consumed by it, and it will take years to pay it all off.

[Related: Thinking of paying the minimum 5% on your credit card? Think again…]

“I have one credit card but I’ve exhausted my credit limit… XYZ bank just offered me a new credit card and a higher credit limit, should I apply for it?”

What’s worse than debt on one credit card? Debt on multiple credit cards! Given that you’ve already maxed out your first credit card, you will most likely end up doing the same with the second one. Focus on repaying the outstanding balance on the first card. You should only apply for the new card if it comes with an introductory zero percent balance transfer option. In that case, you could transfer your existing credit card balance to the new card and use the interest-free period to repay the dues.

“My wife and I are stuck with debt on two personal loans and four credit cards. We’ve been denied debt consolidation by most banks… Our friend advised us to meet with a local moneylender who could help us out…”

Stay as far away as you can from these illegal moneylenders or ‘loan sharks’, as they’re commonly called. They might offer you a hassle-free loan to help you out financially, but the exorbitant rates they charge coupled with no-transparency regarding the terms of repayment, can land you into a financial mess.

Our advice is to start repaying your existing debts as soon as possible and close them one by one. Cut all unnecessary expenses, and tap into your savings or assets back home if that’s an option. You can choose from two commonly used repayment strategies – ‘Debt Stacking’ wherein you pay off the debt with the highest interest rate first and continue to repay debt in descending order of interest rates being charged, or ‘Debt Snowball’ wherein you pay off the smallest debt first and then move on to the next.

[Related: How can you pay off your loans faster?]