Crushing debt is a big reason why General Motors ( GM) is teetering on the brink of bankruptcy. Companies as diverse as MGM Grand ( MGM) and Sirius XM ( SIRI) are all creaking under huge debt loads. The flow of credit may grease the wheels of the American economy, as these examples demonstrate, debt can be a burden. So, with that in mind, it's important to avoid bad borrowing habits in your own finances.Here are five of the worst bad-debt habits and ways that you can work to avoid them: 1.) Charging it: Credit cards are useful tools that can help you track your spending, but the abuse of plastic can lead to financial ruin. "A major mistake is to charge more than you can pay for when your bill comes due," says Gail Cunningham, vice president of public relations for the National Foundation for Credit Counseling. "If you buy something that's on sale, but have to pay it off over several months, your interest payments cancel out all of the savings." Fix it: Write your credit card purchases in your checkbook with a different colored pen. That way the money you have in your account factors in credit card charges as well as checking transactions. 2.) Skipping a payment: When it comes to your credit card debt, you should never make a late payment, skip a payment or pay less than the minimum, explains Cunningham. "That's a red flag to the bank and your creditors," she says. "And it can dramatically lower your credit score." No only that, but you'll get charged a hefty fee. Fix it: If you're strapped for cash and can't afford your credit card payment, for now, make only the minimum payment required and build up your cash reserves. The benefits of establishing an emergency fund outweigh the long-term costs of paying only the minimum payment. But be careful, if you only pay the minimum for too long, you'll see your interest start to mount. 3.) Using too much credit: Regularly using more than a third of your available credit could lead to a drop in your credit score: lenders will see you as being cash-strapped and therefore a higher credit risk.