Credit Cards

Did you finish college with credit card debt? 3 tips to deal with it

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Don’t worry, your debt doesn’t have to go on forever.

Key points

  • Many people leave college with a ton of credit card debt.
  • The right approach could make it easier to pay off that debt and move forward with a clean slate.

If you always found yourself cash-strapped in college, you were probably in good company. Many college students end up racking up credit card debt, in large part because they can’t work full-time (or, in some cases, even part-time) while earning a degree.

But if you’ve had a lot of debt since you finished college, you may be anxious to get rid of it quickly. Here’s how to tackle that debt so it doesn’t hang over your head for years.

1. Find out which debts are costing you the most

Do you owe money on a few different credit cards? Chances are, each card will come with a different interest rate attached to it. One of the first steps you need to take to get rid of your debt is to see which cards charge you the most interest, because those are the debts you’ll want to pay off first.

You may assume that you should tackle smaller debts first, as they are easier to eliminate. But if you owe $500 on a credit card that charges 12% interest and $1,000 on a card that charges 16% interest, it’s worth addressing the largest balance first.

Granted, attacking the bottom balance might be good for your morale. But it’s important to see the big picture and minimize interest charges, because doing so will make it easier to pay off your debt for good.

2. See if you qualify for a balance transfer

A balance transfer could be a good way to consolidate your existing debt and make repayment easier. This is especially true if you can get a 0% introductory rate offer.

But be careful: Balance transfers can trip you up if the fees to move your balances are high. And also, for a good deal, you’ll need decent credit. If you don’t have that, you may not qualify for an offer worth pursuing, or you may not be able to do a balance transfer at all.

3. Look at a personal loan

A balance transfer can help you consolidate your debt so you’re making one monthly payment instead of managing four or five different accounts. A personal loan could have a similar effect, and while you generally won’t be able to get a personal loan with a 0% introductory rate, these loans generally charge less interest than credit cards in general.

Of course, as is the case with a balance transfer, a poor credit score may qualify you for a personal loan. This doesn’t mean you won’t be able to take one out, but you may be stuck with a higher loan rate than you’d like. But if you have fairly good credit, a personal loan is definitely worth considering.

Graduating from college with credit card debt can be a difficult thing to handle mentally and financially. But as you establish a career and start earning a steady income, you’ll be in a stronger position to deal with that debt. And if you take the right approach to eliminating it, you may be debt-free before you know it.

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