[Wine] Martin Pelmore, College Grads - Wave Goodbye To Credit Card Debt

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Fri Jan 4 04:59:11 CST 2008

Martin Pelmore, College Grads - Wave Goodbye To Credit Card Debt

As you leave college life behind, you?re probably carrying a lot more around
with you than just a shiny new diploma. If you?re like most college grads,
you?re carrying the burden of credit card debt?lots of it. In fact, the
average college graduate leaves school with over $2,000 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 isn?t? Cut out a few of life?s everyday luxuries and you?ll 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. Don?t 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 you?re 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 you?re getting from your savings account is nothing
compared to what you?re paying in credit card interest. If only you could
get an 18 percent return on your money! Pay that balance off in full, and
it?ll save you big in the long run.

Get down and grovel

If times get really tough, consider asking for help from your family. It?s
hard to say no to a family member, and you?ll probably get a pretty
reasonable interest rate from them, as well. Just don?t go to the well too
many times; you don?t 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 ?B-Word? on creditors

If you still can?t 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 you?re going to have to declare
bankruptcy unless you can work out a plan with them. Credit card companies?
least favorite word is bankruptcy. If you go that route, they don?t get
paid. They have no choice but to work with you. Ask for a lower interest
rate and a slower repayment plan. While they?ll do everything they can to
help, remember, you got yourself into this mess, you need to get yourself

Paid off? Stay that way

So you?ve 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. You?ll 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 don?t use
a credit card unless it?s an absolute emergency.

 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:
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