When used responsibly, student credit cards can be great tools for building solid foundation of credit history. A study conducted by Nellie Mae, a reputed student loan center, reveals that college students graduate with an average of $2,700 to as much $7,000 worth of credit card debt.
If you are presently stuck with credit card debt, don’t panic. Consider the following strategies to eliminate your debts one step at a time.
Strategies to Eliminate Debt on Credit Card for Students
1. Take charge. Even if your credit card debt seems insurmountable, it’s never too late to recover. Take positive action right now and build up your motivation.
2. Know your debts. Before trying to figure out a solution, you need to be aware about the exact status of your debts. Review your billing statements. Order a copy of your credit report so you can check all the accounts you have.
Make sure that there are no unfamiliar charges in each of your accounts. If there are errors, call your Issuer right away to correct the matter. If your creditor refuses to act upon your complaint, send a dispute letter to the credit bureau that issued your report. An investigation will take place within 30 days. Afterwards, you will be notified about the result of the investigation along with an updated copy of your report.
3. Create a doable repayment plan. It is important to create a written plan that you can use as a guide towards debt recovery. Do your best to follow the plan no matter how difficult or inconvenient it may seem.
4. Transfer high rate debt. One way to ease your burden is to get a credit card for students with a low or zero balance transfer rate. Transfer all your outstanding balances from your high rate card. This way, you can pay off your debts without the additional interest rate charge.
Choose a zero rate balance transfer credit card with a sufficient introductory period and reasonable fees. Remember, you’ll need to complete your payments while the zero interest is still applicable. Carefully read the fine print to make sure that the Terms and Conditions are fair.
5. Stop spending. You will surely have a difficult time paying off your debts if you continue using your credit cards for students on new purchases. This is not the time to splurge. If you need to use your card to keep your account from closing out, use it only for a small purchase and pay it back the same day you made the purchase.
6. Cut costs. Find ways to cut back on your monthly bills and personal expenses. For instance, you may consider giving up some subscriptions or switch to a lower plan of cable, internet, etc. Every cent you save, you can put aside to pay off your debts.
7. Seek professional help. Don’t be afraid to seek help from a trusted credit counseling agency. A credit counselor should be able to give you advice on how to manage your finances more effectively.
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