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

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

Key points

  • Many people graduate with a pile of debt on their credit cards.
  • The right approach could make it easier to pay off that debt and move forward with a clean slate.

If you found yourself perpetually strapped for money in college, you were probably in good company. Many students end up racking up debt on their credit cards, largely because they can’t work full-time (or in some cases, even part-time) while in school.

But if you’ve since graduated from college with a pile of debt, you might want to get rid of it quickly. Here’s how to tackle that debt so it doesn’t weigh you down for years.

1. Determine which debts are costing you the most

Do you owe money on several different credit cards? Chances are that each card will come with a different interest rate. One of the first steps to getting rid of debt is to figure out which cards are charging you the most interest, because those are the debts you’ll want to pay off first.

You might assume that you should tackle small debts first, as they are easier to eliminate. But if you owe $500 on a 12% interest credit card and $1,000 on a 16% interest card, it’s best to tackle the larger balance first.

Granted, attacking the lower balance could be good for your morale. But it’s important to see the big picture and minimize your interest charges, as this will make it easier to eliminate your debt for good.

2. Check if you are eligible for a balance transfer

A balance transfer could be a good way to consolidate your existing debt and make it easier to pay off. This particularly applies if you are able to secure a 0% introductory rate offer.

But be careful – balance transfers can trip you up if your balance transfer fees are high. And also, for a good offer, you will need decent credit. If you don’t have it, you may not be able to qualify for a valid offer or you may not be able to complete a balance transfer at all.

3. Consider a personal loan

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

Of course, as is the case with a balance transfer, a not-so-good credit score could stumble you on the path to qualifying for a personal loan. That doesn’t mean you can’t get one, but you might end up with a higher borrowing rate than you’d like. But if you happen to have pretty good credit, a personal loan is definitely worth looking into.

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

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