You’re a young adult, starting to build your career. You’re trying to juggle student loan payments, pay your rent and cover other bills, so it’s tempting to rely on a credit card to get you through next payday. No big deal, right?
Think again. One of the first lessons of young adulthood: It’s much easier to get into debt than out of it.
According to the National Foundation for Credit Counseling, the average 25- to 34-year-old carries $5,000 in credit card debt. If that debt isn’t managed well or it grows bigger, imagine the interest you’d be paying on that latte or pair of shoes you couldn’t live without at the time. Before you go wild with the plastic, these five tips will help you maintain control of your debt.
» Tip #1 Don’t spend more than you earn.
A survey by Renters.com says young adult renters overspent their income by $100 each month. Avoid using credit cards for everyday purchases that could easily be paid with cash. Remember too, willpower goes a long way.
» Tip #2 Get a handle on what you owe.
If you carry a balance on one or more cards, the key is to pay more than the minimum each month to reduce the debt more quickly or, better yet, pay the balance in full. These good habits will help establish a strong credit history.
» Tip #3 Close your eyes when you get the mail.
Avoid the temptation of the parade of credit card offers that entice you with low introductory rates and balance transfers. Applying for new cards all the time can ding your credit score.
» Tip #4 Stick to a budget.
By balancing your income against expenses, you’ll keep a firm grip on wasteful spending. If rent, transportation and food eat up the greatest share of your monthly budget, then consider living with a roommate or several, carpool to work at least a few times a week, and dine in instead of out. You may miss the social scene, but your wallet won’t.
» Tip #5 Build up some emergency savings.
Setting aside a little every month avoids the need to put a surprise expense on a credit card. Medical or car troubles can rack up debt in no time. An emergency fund will make it a lot easier to handle when you least expect the unexpected.
Now that you have tips to tame your debt, want something to roar about? Consider a low or no fee credit card from Navigator Credit Union. There are options fit for you, your goals and your lifestyle. Visit www.navigatorcu.org or call (228) 475-7300.