Getting Through Grad School on Credit Cards
During her graduate degree program, Paola S. was a full-time student who didn’t even have a part-time job because she wanted to focus on her studies. With little to no income, she turned to credit to help cover books, food, gas and groceries while she finished school.
By the time she finally graduated, she was over $2,000 in the red. Paola endeavored to reduce her debt on her own but made little to no progress doing it herself. The interest rates were exorbitant and payments towards her debt hardly made a dent.
“I was concerned and overwhelmed. I wasn’t making any headway with payments on my own so I really wanted a chance to consolidate and get my accounts in good standing.”
So Paola went in search of an avenue to relieve her debt woes…
Paola scoured the internet for debt relief programs. She came across Consolidated Credit – a company that has an A+ rating with the BBB has been in existence for over 20 years and has helped over 5 million people achieve their financial goals.
“I found Consolidated Credit’s website. I went through it and then picked up the phone and made that call. What a huge relief it was and has been. They made it very easy. Every representative I have ever spoken to from that moment I called has been extremely knowledgeable, helpful and supportive. They told me exactly what I needed to do and provided a lot of information to help prevent future problems. I have also gotten a lot of information on your website too.”
The debt management program provided more than debt relief…
Ever since she enrolled in the debt management program, Paola has made tremendous strides in getting out of debt. In about a month, she will be debt free and will graduate from the debt management program armed with the numerous financial lessons and resources to use to maintain stability moving forward.
“The biggest lesson I’ve learned is to be mindful of how many lines of credit are open and what they’re being used for, because with interest rates they can easily spin out of control even if you have the best intentions at the time,” she says. “In my case, I was just using it to help support my graduate program and books and other expenses. Once you have too many lines of credit open it just gets out of control.”
Although Paola can’t recall the exact rates on her cards, she knows that they were all above 20 percent and that Consolidated Credit was able to negotiate much lower rates with her creditors.
When a client with high interest rate credit card debt enrolls in our program, our certified credit counselors are tasked with negotiating lower interest rates with their creditors. In some cases, creditors agree to reduce their rates to as low as zero percent. A lower interest rate means more of each payment goes towards the principle as opposed to accrued interest charges. That’s how clients are able to get out of debt sooner than if they continued making minimum payments on their own.
Paola’s debt woes created a domino effect that decreased her credit score…
When Paola reached out to us for help, her problems with debt had already impacted her credit score. While some debt relief options like debt settlement and bankruptcy can definitely hurt your credit, depending on your situation, a debt management program may actually help improve your credit over time.
For Paola being on the debt management program increased her credit score.
“I cannot remember the before and after numbers but my credit score definitely improved. That I know for sure.”
The biggest contributor to one’s credit score is on time and consistent payments. Because clients on the debt management program make monthly payments towards their debt, it is easy to see why her score got a boost.
Credit cards can be both curse and a blessing as Paola can attest. Although she may not swear off credit cards for good, she plans on handling them with caution.
“I may have just one or two to continue to build my credit and for emergencies to have some kind of rotating/revolving credit line.”
While we advise our clients to keep credit card debt at bay it can be useful to have at least one credit card in good standing for just the reasons Paola mentioned. The key is to pay any charges on time and in full to avoid paying interests, late fees and or penalties. There are also other ways to use credit without endangering your financial stability.
With her credit score in recovery and rising, and a close to zero balance on her credit cards, Paola will soon be free to move forward.
“I’m really excited and very happy. Thank you for helping me get this load off.”
Paola’s new found freedom calls for celebration, but how will she celebrate?
“Definitely not by spending,”