How to Eliminate College Credit Card Debt in Two Years

If you have college credit card debt, the best thing you could possibly do for yourself is to make getting out of debt your number one priority in life. If you’re looking for a way to build your credit, you have to be focused on being debt-free first.

You must make this your mission and let nothing stand in your way. If you are in a relationship, you must get your boyfriend or girlfriend to support you fully if you want to change your credit card story. This is a deadly serious matter and one that will have a huge impact on all aspects of your future depending on how you deal with it.

Your success in this endeavor will be the cornerstone of your financial future. If you aren’t successful, it will be the anchor holding you down for many many years to come. Now that you’re convinced and you’ve made getting out of credit card debt your mission, let’s take a look at how you get it done.

1. Assess the situation.

Why do you have this credit card debt? Are you spending more than is coming in? Was it the result of a catastrophic event? Do you know how to stop spending money? What exactly is or was the problem?

In order to answer this, you must have a system in place that tracks your income and expenses. I’m a huge fan of a program called You Need A Budget. It’s simple to install and update. It shows you exactly where you are spending your money and tracks your income too.

The bottom line is that if you’re in a hole, the best way to get out is to first stop digging. Make sure you have a system to track your monthly spending and keep updating that system. Make sure you’re living within your budget.

2. Cut.

Getting out of credit card debt is going to involve sacrifice. It’s going to sting a little. When your pals go party it up for spring break, you might have to spend your vacation working at your mom’s transmission shop. There is a price you’re going to have to pay. Do you accept that? If not, you might as well stop reading now. You aren’t going to get different results with the same behavior. And I’m not going to try to convince you to grow up if you haven’t already convinced yourself it’s time.

Resolve yourself to the fact that things are going to have to be very different and they’re going to start changing now. List all the things you’re going to cut in order to get out of debt slavery. Are you willing to do what it takes? How about moving back in with your folks? What else are you willing to do? To what extent are you willing to go in order to be free of debt? Start cutting now.

3. Reduce the cost of debt.

Once you have a plan to cut your spending and track your expenses, you can go to your family and ask them to consider making you a personal loan. This will enable you to pay off the thieves at the credit card companies and pay your family back at a more reasonable rate. If you can cut your interest expense from 12% to maybe 6%, you can make the same payments but apply that much more to the principal you owe rather than to the high interest rates that these companies sometimes charge. Consider other alternatives to credit card debt as well.

Once you have a plan and demonstrate your newfound responsibility, your family will likely be only too happy to help you get out of debt.

4. Apply leverage.

Put everything you have towards the highest interest debt first. Once you’ve paid off that dept, apply all you’ve got towards the second-highest-cost debt. This is what’s referred to as a debt snowball. As you pay off your debts, you’ll have less money going towards interest. This is exactly what you want. You then apply the same amount towards your next highest-cost debt. As you can see, the amount you have available to retire your debt grows and grows, making it easier and easier to completely get out of credit card debt.

5. Never let this happen again.

You’ll work hard to get out of credit card debt, but it’s worth it. By doing this, you’ll master the skills you need to keep your spending in line. This is going to be the bedrock of your financial strength for your financial future.

The average college credit card debt is rising as fees and tuition is going up. Work hard and don’t become a victim of this. I know you can succeed.