With the cost of education rising and the nation finding itself moving steadily toward a debt-for-education trend, more students than ever before are graduating in a huge credit card hole. In fact, a recent study by Sallie Mae shows one third of all students put some of their tuition on a credit card, and the average charges amount to thousands of dollars. If you have had to use your charge card during school, you now need to figure out the best way to get out of debt. This is easier said than done, but there are some helpful steps you can take to get started down the right path.

If you feel as though your debt is beginning to get out of control, the first thing to do is stop charging. This seems impossible, but it is very important. The only way to get yourself out of a hole is to stop digging. Cut up all your credit cards, or at least put them in a safe place that is not easily accessible.

Now, assess your overall debt. Make a list of each credit card, its outstanding balance, interest rate, and minimum payment. This will help you see where you are financially and which cards are doing the most harm. Add up every minimum payment to find the total amount that you must pay toward your cards each month.

Next, make a budget. Make a list of all bills that you must pay. If there is anything extraneous, such as cable or Netflix, get rid of it. Tally up your bills to get an amount that you must center your budget around. Subtract that number from your total income, and divide up the rest for food, gas and other living expenses. Try the best you can to live within the boundaries of your budget. For example, maybe you only have one hundred dollars a month for food. You will need to cut out any luxuries. Stop eating out and getting coffee. Cut out any expenses that you don't absolutely have to incur in order to live, and plan to budget that way for a long time.

Ultimately, you should consider talking to a loan counselor. There are many reputable agencies that specialize in helping people get out of credit card debt. Due to the high interest rates, sometimes credit card debt can feel like a mountain that just keeps growing. A good loan counselor will have seen these kinds of issues every day and be able to help you get some perspective on your situation. They should also have insider knowledge about the best financial moves to make and may even be able to help you reduce the size of your debt or transfer your loan to an institution with a lower interest rate.

For information on credit counselors, go to the website for the National Foundation for Credit Counseling at Nfcc.org. There is also a list of approved credit counseling agencies at Justice.gov.


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