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Dealing with both student loans and credit card debt

| Jun 30, 2016 | Personal Bankruptcy |

Both student loan debt and credit card debt are huge problems for many people in North Carolina. While all kinds of debt are stressful, it appears that these two types of debt are particularly worrisome to those to have them. According to the Christian Science Monitor, a recent survey indicated that of 25 percent of people who have credit card debt also have student loan debt. In addition, of those people who have student loan debt, 65 percent are stressed about their finances.

Considering that there is enough credit card debt in this country for each household to owe almost $16,000, and enough student loan debt for a family to owe more than $48,000, all the stress being reported is not surprising. It is also not surprising that many people feel regret about their debts. Regrets over student loans were reported by 47 percent of people who have credit card balances.

Both types of loans have their disadvantages. Credit cards are easy to come by and often come with low monthly minimum payments. However, the interest rates are relatively high and can soar even higher if you miss a payment. A college education is expensive these days and student loans may seem like a good investment, but even if a degree in a desirable field is obtained, there is no guaranty of a job or of any income to start paying off one’s debt.

When deciding which debt to try to pay off first, there is no one size fits all approach. One strategy, according to The Street, is to pay off whichever debt has the lowest balance first. Doing so will likely feel like an accomplishment and motivate a person to keep tackling their debts one at a time. For most people, this means continuing to pay the minimum amount on their student loans and getting rid of their credit cards first. Another strategy is to tackle the debt with the highest interest rates first, since high interest debts cost more money over time. Whatever strategy is utilized, it is possible to pare down student loan debt and credit debt, and doing so should also help to reduce stress levels at the same time.