Debt Relief and the American College Student

For the average American college student, days are filled with class, friends and seemingly free money. Credit card companies have found an eager market in the nation’s fickle college students, who are all too ready to charge up a mountain of debt with nary a though of the consequences.

But there are consequences. Indebted college students, poorly educated about finance, debt and savings, leave college owing an average of $20,000, $3,200 of which is unsecured credit card debt. This amounts to a huge post-college burden, as the average starting salary for a recent graduate hovers around $30,000.

So who’s to blame?

• The credit card companies, at least partially, for foisting cards upon uneducated kids knowing full well that most of them are unprepared to navigate the very adult world of consumer debt. They are confident that if these kids’ parents are willing to pay for school, they will help out when their son or daughter winds up in financial distress.

• The colleges and universities across the country, for allowing these credit card companies to set up tables and booths on campus registration days nationwide. These institutions have a responsibility, as educators, to at least help their students learn the financial basics and shield them from the greedy grasp of big-time lenders.

• The parents themselves, for not educating little Sally and Bobby college student about the dangers of credit card debt. It is imperative that parents teach kids early on about finance. Without proper education, bad credit debt can stay with an American consumer for life, and the earlier they are warned about debt the less likely they are to wind up buried in it.

For graduates needing credit repair, there is help.

• First, pay more than the minimum balance on your cards every month. Paying just the minimum is a surefire way to prolong your debt for years, if not decades. Pay as much over the minimum balance as possible, and once you’ve paid off the card with the lowest balance, move on to the next.

• Create a budget. This will help you eliminate wasteful and excessive spending. Oh yeah, and eliminate wasteful and excessive spending. Do you really need internet at home? That new Louis Vuitton purse? Food? Ok, you probably need food, but be very careful about your spending. Remember, spending thoughtlessly is how you got into debt in the first place.

• Save. You may think you may not have enough to start saving now, but you do. Focus on paying down your debt, but set aside a little bit every month for an emergency fund. Use this money to pay for stuff like car/home repair or hospital bills. If your company has a 401(k) plan, join it. It is never too soon to start saving for retirement.

Alas, some college graduates may be beyond reprieve. Those unlucky souls who’ve accumulated more debt than they can reasonably repay (we’re talking MAJOR debt, definitely over $20,000) there are two options:

• Bankruptcy, which is never fun, and which will stay on your financial record for at least 7 years. It’s scary to think of starting off your adult life with a bankruptcy, but unfortunately some have no other choice.

• Debt settlement. Some creditors will work with you to cancel a portion of your credit card debt. You pay off the remainder, but your settled credit card debts are cleared much faster. Debt settlement companies have valuable experience and can help lower your credit card debt more than you can on your own.

Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. He studied English literature at the University of Dallas. He is also a ninja master. Please find the rest of his articles by following this link: debt relief articles.