• Chantal Porter

A Deeper Look at Student Loans and Credit Card Debt

Updated: Aug 28, 2019

What is your dream? Probably you have always wanted to be a Doctor, a Nurse, Lawyer, Accountant, or whatever else. For many, this dream is impossible without external financial assistance. Everyone is not the product of a home with financially stable parents. We all have our unique situations and aspirations. To facilitate these academic dreams, we sometimes have to turn to student loan institutions.

A little history

When I first realized that I would have to use an education loan, I was mortified. At the time I did not understand the dynamics. Furthermore, I was unhappy with the future sum that I would have to repay. The mere thought of student loan debt was unattractive. Nevertheless, it was the only way that I could move forward with my studies, so I took the loan. My decision lessened the overall burden on my parents, but it was not eliminated. Given that I had to leave Westmoreland for school in Kingston, my hall fees played the role of my school fees. It was a burdensome experience for me, my parents and other family members who cared to help.

The funny thing is if I could relive the moment I still would have taken the loan. In case it sounds crazy to you, here's why-

1. I desired a better future for myself and my family.

2. It was the only solution at the time.

3. I had to complete school within those 3 years.

4. I was not eligible for a scholarship at the time.

Student Debt

Here are my suggestions if you also need to use a loan to complete your education:

1. Read the contracts that you receive and understand them before signing off.

2. Be conscious of your decision.

3. Make a repayment plan- (calculate the overall sum that you are expected to repay and work out how you will make the payments).

4. Compare the options that are available to you (do the research).

5. Do not be afraid to ask questions (do not be bullied into a decision by anyonee).

6. Look at scholarships and grants (do this before you decide to take on a loan).

Credit Card debt

Another scary side to debt that I stumbled upon is credit card debt. I, myself have fallen victim to the fallacy of free money. In previous times, I would shriek at the thought of owning a credit card, but once you get your feet wet in debt, the fright disappears (ps. My rhyming skills are on point today!) Here's the truth, it's not easy to get out of debt. It can become a vicious cycle if you're not careful, whether it is credit card debt, student loans, car loans, etc.

The cycle of Credit card debt

Here is an example and I do hope you cannot relate:

Jessica receives a salary of $4000 US on the 25th of every month. Jessica then uses her salary to pay a few of her bills and uses the remainder to treat herself. By the 10th of each month, Jessica only has enough money left to cover transportation for a few days. She then uses her credit card to live through the rest of the month. When Jessica receives her salary the following month, she clears the card and pays the bills. By now, she has no cash left, so she has to use the credit card.

The cycle described above is nothing short of a death trap. It holds you hostage and will continue to do so unless you take action. People fail to realize the reason why they incur such high credit card debt. There is one obvious reason why:

Your expenditure outweighs your income!!!!

If you are always spending more than you earn, your bank account and pockets will always have a negative balance.

If you could relate to Jessica earlier, here are five ways that you can pay off credit card debt:

1. Monitor your spending-

Walk with a spending tracker and write down everything that you spend on. The guilt from seeing how much you spend will help to curb your spending habits.

2. Do not try to pay it all off at once-

If you truly want to get out of credit card debt and stay out, repay in installments (when all your income goes to the credit card you will be forced to use it to survive.)

3. Understand how your billing cycle is calculated-

Work with and around it to avoid late fees and interest. Furthermore, know what your balance is at all times.

4. Live within your means-

You have nothing to prove to anyone. Spend wisely and maintain a steady budget.

5. Assess where in your life you can spend less-

If you spend less even for a short period of time, it will kick-start your financial recovery.

Spend the time to assess and plan your life. Failure to do so will result in you incurring haphazard debts. I hope these tips were able to help you with building your financial backbone. Afterall, we are responsible for our own success, so I advise that you take control of your life.

This is CPwRites- To the Future You!!

"Would you like me to give you a formula for success? It's quite simple, really: Double your rate of failure. You are thinking of failure as the enemy of success. But it isn't at all. You can be discouraged by failure or you can learn from it, so go ahead and make mistakes. Make all you can. Because remember that's where you will find success."

-- Thomas J. Watson

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