Career Development

Managing Your Debt

Credit Cards

Credit card companies market extensively to recent grads. It is tempting to say yes to their offers thinking that you can afford to make the minimum monthly payment on your balance. But keep in mind that if you have a debt of $1,000 and make only the minimum payment each month it would take 15 years to pay it off and cost almost $2,000 in interest. Some credit card advice:

  • Get one card for emergencies and to establish a credit history, which you will need when you want to borrow money for a car or a house. (If you have a card co-signed by your parents you are not building your own credit history; therefore you need to apply for a card on your own)
  • Shop the offers for the lowest interest rate.
  • Pay cash for most things, saving the credit card for big ticket items.
  • Try to pay off debt as quickly as possible.
  • Pay your bills on time. Late and missed payments go on your credit report and could hurt you when you go to get a loan to buy a car or house. (The due date on bills is the day the check should be there rather than the day you need to mail it.)

Student loans

You should be given loan information from all of your lenders, usually as part of an on-campus exit interview. Become aware of all of the repayment options available including loan consolidation, standard repayment, and graduated repayment, by contacting your lending institutions. Deferment or postponement of loan repayment is your right if circumstances (such as admittance to a graduate school program) warrant it. Forebearance allows you to extend your payment schedule at the discretion of the lender.

Credit Problems

Contact your lender immediately if you find yourself having trouble repaying in order to avoid a default situation. Any late payments (on credit cards, loans, phone bill, rent) could be reported to a credit bureau and could impact your ability to get a loan or mortgage in the future.