It is not an unknown fact that pursuing a college education is three times more costly than graduating from high school. But the more alarming fact is that most college students graduate each year with unpaid credit card debts amounting to about $13,300 on an average, that doesn’t include their student loan debts! If you’re a college student, surely you should be more conscious about the status of your credit.
But what if you do find yourself incurring student credit debt that you can barely keep up with? What can you do to straighten out the situation? Is there a credit repair guide that can help you get out of this situation on your own? In this article, let’s focus on the steps that you can do yourself to get out of credit card debt.
How to Avoid Debts on Your First Credit Card
Do a self-check. A personal analysis of your spending habits is the first step so you can really see the weight of the problem you’re facing. How much do you spend for the whole month? To be objective about your answer, get a pen a paper and jot down everything you purchased or paid for in the past month. This should include your utility expenses, school expenses, as well as the money you spent on your personal needs and for leisure. Write down everything and compare the total with your monthly allowance.
The realization. After putting it all on paper, what did you find out? Have you been spending more than what you should on your personal and leisure expenses? Do you often use your student credit card for those expenses? Are there adjustments you can make in your lifestyle to help you cut down your expenses each month? Realizing the actual problem will help you move on to the next steps in your attempt to repair your credit.
Create a budget plan. As a student, you can create your own budget plan by writing down in advance your priorities in expenses. Of course, this should include your debts, utility bills, your rent, food, tuition and other school fees. Next jot down the budget you’ll need for your transportation allowance and other everyday expenses. Don’t forget to write down the money you need to set aside for your personal savings and insurance. Finally, write down the budget you’ll need for your personal spending such as your clothes, going out with friends, snacks, etc.
By jotting down all the things you need to pay and prioritizing them according to their importance, you can allocate your monthly allowance more effectively. This will help you avoid spending your money on unplanned purchases while leaving you unable to pay for the more important bills.
Pay your credit card bills. If you have currently have unpaid balances on your credit cards, you should prioritize paying off these debts as soon as you can. Don’t forget that the monthly interest you incur in your student credit card will only put you in more debt as you let time pass. Find ways on how you can collect the money to pay off your student credit card completely. You may need to make some sacrifices on your own budgeting at least until you can pay off your credit card debt. You may also borrow money from your parents or relatives to get out of debt more quickly. Just remember, be responsible enough to pay for what you owe even if they’re from your family.
About the Author
Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.