college grads wave goodbye to credit card debt
As you leave college life behind, youre probably carrying a lot more around with you than just a shiny new diploma. If youre like most college grads, youre carrying the burden of credit card debtlots of it. In fact, the average college graduate leaves school with over $2,000 in credit card debt.
Sure, some of it might still be from the ring break trip your junior year, nonetheless most of it was probably racked up from school-related costs such as textbooks, school su lies, and food. No matter, debt is debt, and the worst kind of debt is from credit cards. You need to get rid of it as soon as you can. We know funds are tight, nonetheless by setting yourself up a payment plan, you too can quickly eliminate credit card debt.
Do more than just the minimum
With interest rates on credit card balances ranging as high as 18 to 23 percent, credit card companies would love for you just to pay the minimum amount every month. If you do this, the interest kee compounding, and the credit card company kee getting fatter as your debt rises. Put them on a diet; pay at least double the minimum every month on your balance. In a crunch? Who i t? Cut out a few of lifes everyday luxuries and youll find yourself with the extra cash to put towards your balance.
Bait and Switch
Credit card companies love to send out promotional offers for cards touting low or no interest balance tra fers for a set amount of time. Dont be so quick to to them. With a little crafty maneuvering, you can make them work to your advantage. If you have one or more cards with balances incurring a high monthly interest rate, co ider moving these balances over to this new low rate. It can save you a ton of money. But beware, most of these cards can hit hard after the promotional period ends, with rates that probably higher than what youre paying now. But if you contemplate you can pay off the balance within the promotion time, make the switch.
Sacrifice your savings
Sure, it sounds horrible, nonetheless draining your savings account is a great way to get out of debt. Put it this way: the miniscule amount of interest youre getting from your savings account is nothing compared to what youre paying in credit card interest. If only you could get an 18 percent return on your money! Pay that balance off in full, and itll save you big in the long term.
Get down and grovel
If times get really tough, co ider asking for help from your family. Its hard to say no to a family member, and youll probably get a pretty reasonable interest rate from them, as also. Just dont go to the well too many time you dont intend to to be known as the freeloading relative. Be profe ional about asking for a loan, even suggesting a written agreement to show your family member how serious you’re about paying them back.
Drop the B-Word on creditors
If you still cant seem to make your payments, call your credit card companies and have a financial heart-to-heart with them. Tell them that your back is agai t the wall financially and youre going to have to declare bankruptcy unle you can work out a plan with them. Credit card companies least favorite word is bankruptcy. If you go that route, they dont get paid. They have no choice nonetheless to work with you. Ask for a lower interest rate and a slower repayment plan. While theyll do everything they can to help, remember, you got yourself into this me , you need to get yourself out.
Paid off? Stay that way
So youve begged and borrowed and somehow got your credit cards paid off. Now the challenge is to stay that way. First, rid yourself of surplus cards. You should only have one, two to . Close out the rest of those accounts as soon as you get them paid off. Youll be le tempted to employ them, and fewer cards are easier to keep track of. The next step: stop using credit cards all together. Leave them at home, cut them up if you have to, nonetheless dont employ a credit card unle its an a olute emergency.
