Online Credit Counseling Tips

• College Students: Credit Card Debt Trap for a college student
• Instead of a New Year's resolution, make debt reduction a goal for life.
• Why is paying the Minimum Monthly Payment not enough?
• Holiday Spending: How to keep your debt load down
• Is there an alternative to debt consolidation and/or personal bankruptcy?

College Students: Credit Card Debt Trap for a college student

More and more college students have credit cards than ever before. According to this Nellie Mae study, the average balance of an undergraduate student with a credit card is rose from $1,879 in the 1998 to $2,748 in 2000. While credit cards may present a good way to establish credit and learn financial discipline, too often many students amass a significant amount of debt by the time they graduate. Couple this with student loan payments, and the credit card debt becomes a burden. Additionally, at the high interest rates charged to students, it may take years to pay it off by paying only the monthly minimum.

How should a student with debt troubles cope with this? Stop charging! By continuing to use your credit card, you increase your debt load. Start using cash to pay for the things you would normally use your credit card and reserve that troublesome plastic for emergency purposes. Pay more than the monthly minimum. The monthly minimum barely covers the interested charged on your debt. Paying more than the monthly minimum, is money paid towards interest and your balance. The more you pay, the more your money goes towards your debt! Get help from family. Sometimes, you may need to ask family members or a trusted friend to help you pay it down. It is possible that they can lend you money at a much better rate than the APR on your credit cards. 1% is much better than 19%! Debt Consolidation can help you reduce debt. If you have exhausted your resources, there are many debt consolidation programs and credit counseling agencies that can help you reduce your debt. They will negotiate with your creditors and setup a financial plan to pay off your debt.

If you're a college student overwhelmed with debt, it's not to late! Reducing your debt can improve your credit score and give you advantages when purchasing things like a new car or a new home. So don't hesitate, start a debt free life today.

Posted Nov 2005 [ linkback ] return home