Eliminating your Credit Card Debt
Issue date: 9/10/10 Section: News
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College students frequently fall victim to credit card debt because they figure they will go into debt while in school and simply pay it off later when they get glamorous, high-paying jobs. What they don't always realize is that due to credit cards' absurdly high interest rates, this is extremely difficult to do. If you were to only make a minimum payment on a balance of $2200, it would take you more than 15 years to pay it off (assuming 14 percent interest).
If you have credit card debt, here are three reasons to get out now:
1. The interest is outrageous: Credit card companies charge you 14 percent, on average, for the cost of using their money. Compare this with the less-than-one percent you are earning from your savings account.
2. You are hurting your credit score: 30 percent of your credit score is based on how much debt you have. A low credit score could cost you tens of thousands of dollars in the future when you take out a loan for a car or house.
3. Credit card debt causes stress: You're already worrying about homework and whether or not it is worth going to chemistry class to see the blonde girl in the front - you don't need this debt lurking over your head.