Credit card debt can creep up on you before you know it, thanks to fees and interest that are subject to change (always for the worse) with very little notice. If you’re not in the habit of paying off your credit card balances in full every month, you could soon find yourself mired in debt that never seems to go down even when you make a payment.

Since you can’t close your eyes and make credit card debt go away, you’ve got to find a way to pay it off – the quicker the better. Many people take out loans to accomplish this. It makes sense; better to pay a single monthly payment at a low interest rate than to make several credit card payments each month, all at higher rates of interest.

But some loans are a bad idea. For starters, let’s take a look at home equity loans. They are often easy to obtain and offer low interest rates. But what if you take out a home equity loan to pay off credit card debt, only to find yourself falling behind on your loan payments? Now you’ve got more at stake than your credit score; you could actually lose your house.

If you’re certain you’ll be able to handle the payments, a home equity loan might be useful for paying off other debt. But be honest with yourself. If you think delinquent payments are a possibility, find another source of money that won’t put your home at risk.

Many people borrow against their retirement funds when they want to pay off their credit cards fast. This isn’t a good idea, either. For one thing, the more money you keep in these funds, the more they will grow. The more money you take out, the less growth potential the fund will have. 

Borrowing from your 401K might sound like a fast solution to credit card debt, but consider the consequences: it will be more difficult to keep up your retirement fund contributions while you’re also trying to repay the loan. And if you get laid off, you’ll have about 90 days to repay the whole loan before it gets taxed and penalized.

If your credit card debt can realistically be paid off in a year, try transferring the balance to a card with a 1-year introductory rate of 0% interest. You can also talk to your bank about a low-interest personal loan, and use those funds to pay off your credit cards.

Just paying off the debt isn’t enough; you also need to figure out how you got so indebted in the first place. Were you paying for urgent expenses like car repairs? Then you should set up an emergency bank fund to pull from when those situations arise. Were you simply living beyond your means? Stick to a good budget, and you’ll get everything you need without overspending on frivolous items. There are many ways to cover unforeseen expenses and little extras, but credit cards are a costly option.

One of the secrets of managing your debt load is knowing when to borrow and when to pay cash up front for purchases. As we’ve discussed before, some debt is good. When you’re making payments on an asset that will appreciate or retain its value, that debt is healthy. The problems set in when you start making high-interest payments on items that will quickly depreciate in value. Credit card debt falls into the bad debt category.

We’ve been taught to charge the things we want as well as the things we need. How many department stores offer us credit cards when we check out? Even smaller specialty retailers have credit cards now, and they’re eager to sign people up.

But almost anything you’d pay for with those credit cards should be bought with cash instead. Think about it: the clothing, appliances, and household items found in departments stores will decrease in value almost immediately. Then you’re stuck with interest-laden debt for items that haven’t retained their worth.

A better strategy is to put aside a portion of your income each month for incidental expenses. These are the miscellaneous purchases that don’t count as entertainment expenses, but don’t fall under your static monthly bills either. Always pay for incidentals in cash so that you don’t add to your debt. And before you sign up for department store credit cards, check out the terms and conditions; they might surprise you, and not in a good way. Store cards tend to have higher interest rates than regular credit cards.

A good rule of thumb is this: if something can be viewed as an investment, it’s okay to borrow money to make the purchase. Investments include things that will keep their value or even go up in value over time. A college education, for example, is something that will go up in value by opening doors to higher-paying jobs. A home increases in value as the house and surrounding land get developed.

Large appliances, furniture and housewares, though necessary and very useful, start to depreciate in value after their first use. For this reason, you should avoid borrowing money to pay for them. It’s not good to pay more and more for an item (payments plus interest) while the value of that item keeps going down.

On the other hand, big home improvement projects and other purchases that will add to the value of your home could warrant a loan. Just look for low interest rates and don’t borrow more than you need. Ideally, you’ll be able to repay such loans within five years.

Despite the economic climate, you’ve still got dreams for the future. If those dreams include starting your own business or taking out a loan to consolidate your personal debt, you might find it hard to stay optimistic when banks deny application after application. How can you raise the money to make your plans a reality? Here is a small list of often overlooked resources that could mean the difference between financial success and unrealized dreams.

Your Inner Circle

It can be humiliating to borrow from friends and relatives, but sometimes there’s no other choice. If you do ask them for money to fund your venture, keep things professional. Draw up a business or debt reduction plan just like you would for a bank loan. Tell them how you plan to be successful, and why they’re making the right choice by lending you money. Then come up with a detailed repayment plan that you both approve of. You’ll be surprised how much funding you can get from your friends and family when you show them that you take the endeavor very seriously.

Credit Unions

Credit unions operate on the principle that account holders are members who own a share of the business. That usually garners better customer service and more reasonable terms on loans. If you belong to a credit union, go to them before you hit up a regular bank for money. Chances are, you’ll get approved more easily and with more generous repayment terms. 

Credit Cards

It’s not ideal, but you can fund your business with credit cards. Just factor the interest payments into your costs, and be aware that interest rates can fluctuate with little warning. Look for cards that reward you for purchases you’d be making anyway. Some give you cash back when you purchase certain types of goods or services.

Social Lending Sites

Social lending sites like prosper.com facilitate direct person-to-person lending. If you’ve got good credit, you can go and apply for a three-year loan at a low interest rate. Lenders will then bid on your loan. You can select the lender you want to go with, and the funds are directly deposited into your account. Automated monthly payments ensure that you don’t fall behind in the repayment phase. 

The Government

There are grants and loans available to small business owners. The problem is that some of them require you to live in certain geographical locations, while others lend only very small amounts of money. If you’re hard-pressed to find funding, though, government assistance is worth checking into. Go to grants.gov for more information.

When banks shut their doors and leave you out in the cold, it’s time to get creative and persistent. Use this list as a starting point when it’s time to decide how to fund your small business venture or consolidate your debt.