How to Consolidate Student Credit Card Debt

Credit cards come with minimum payable amounts, which are percentages of the total outstanding on the card. Students often find themselves hard pressed for extra cash and they continue to make only the unavoidable minimum payments month after month. This leads to a huge interest accumulating on the balance, resulting in unmanageable debts in an alarmingly short time.

During the recession, many students found themselves watching helplessly as their debts grew sky high. There was not much they could do then but as the economy begins to settle down to an even keel now and is even showing signs of rearing up, there are some solutions that you can explore. Debt consolidation is one such option than can help debt-ridden students get their finances under control.

Consolidating into a Credit Card

As a student, you typically do not as yet have any steady source of income. This makes it difficult for you to find a lender who will offer reasonable rates of interest with a consolidation loan. However, you can consolidate all your credit card loans into one single credit card. There are some important factors that should be considered before you do this.

Zero interest cards- Choosing the new credit card to consolidate debts with is easier when you know what to look for. A zero initial interest card is a good option for those who are confident that they can make substantial repayments in the initial period. It is important to know that these cards usually come with a higher than normal rate in years following the zero interest period. Unless you pay back most debts during the initial period, you will end up paying more in the long run than with a card that carries low interest.

Extended grace period cards- Cards with extended grace periods are a boon to students. These have a larger time window within which you can pay up to keep the interest payments low. This option allows great flexibility for a student who typically has very little surplus cash lying around.

Professional debt manager- For unmanageable outstanding debt, you can contact debt consolidation professionals. These professionals will help you find an attractive credit consolidation card and also structure a manageable repayment program so that you remain debt free in the future. However, you will have to factor in the fee charged for the debt manager’s services when you study the viability of this option.

Once you get rid of your debts, make sure you stay debt free by avoiding unnecessary loans and using credit cards with utmost caution. This will put you on the path to a financially secure future.

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