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College Grads - Wave Goodbye To Credit Card Debt
As you leave college life behind, youíre probably carrying a lot more around with you than just a shiny new diploma. If youíre like most college grads, youíre carrying the burden of credit card debtólots of it. In fact, the average college graduate leaves school with over ,000 in credit card debt.
Sure, some of it might still be from the spring break trip your junior year, but most of it was probably racked up from school-related costs such as textbooks, school supplies, 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, but 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 keeps compounding, and the credit card company keeps 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 isnít? Cut out a few of lifeís everyday luxuries and youíll 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 transfers for a set amount of time. Donít be so quick to toss 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, consider 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 may be higher than what youíre paying now. But if you think you can pay off the balance within the promotion time, make the switch.
Sacrifice your savings
Sure, it sounds horrible, but draining your savings account is a great way to get out of debt. Put it this way: the miniscule amount of interest youíre getting from your savings account is nothing compared to what youíre paying in credit card interest. If only you could get an 18 percent return on your money! Pay that balance off in full, and itíll save you big in the long run.
Get down and grovel
If times get really tough, consider asking for help from your family. Itís hard to say no to a family member, and youíll probably get a pretty reasonable interest rate from them, as well. Just donít go to the well too many times; you donít want to be known as the freeloading relative. Be professional about asking for a loan, even suggesting a written agreement to show your family member how serious you are about paying them back.
Drop the ďB-WordĒ on creditors
If you still canít 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 against the wall financially and youíre going to have to declare bankruptcy unless you can work out a plan with them. Credit card companiesí least favorite word is bankruptcy. If you go that route, they donít get paid. They have no choice but to work with you. Ask for a lower interest rate and a slower repayment plan. While theyíll do everything they can to help, remember, you got yourself into this mess, you need to get yourself out.
Paid off? Stay that way
So youíve 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 tops. Close out the rest of those accounts as soon as you get them paid off. Youíll be less tempted to use 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, but donít use a credit card unless itís an absolute emergency.
About the Author: Joe Kenny writes for the Card Guide, a UK credit cards site, apply for a 0% balance transfers to clear your credit card debt today.
Visit today: http://www.cardguide.co.uk/