Student loans AND credit card debt. How do I dig myself out of TWO holes?

[MaryaSenna]

Not just with student loans—everyone has those. But I also somehow racked up $4,000 in credit card debt. Eating out, bars, clothes, "treating myself" during finals. It added up so fast and now the minimum payments are due and I'm panicking.

Graduation is in May and instead of being excited, I'm terrified. Student loans are coming for me AND I have this credit card monster. I feel so stupid.

Here's my situation:

• Federal student loans: about $25,000 (I think? I try not to look)
• Credit card: $4,200 at like 22% interest (killing me)
• Job: part-time at a restaurant, maybe $1,200/month
• Expenses: rent, food, gas, the usual

My plan (please tell me if this is dumb):

1. Stop using the credit card completely. Cut it up if I have to.
2. Put every extra dollar toward the credit card. Like, beans and rice mode until it's gone.
3. Once the credit card is dead, start learning about student loan repayment options.
4. Get a "real job" after graduation and hope for the best.

Is that realistic? Should I be doing something else? I'm so overwhelmed and embarrassed. Anyone else been here? How did you get out?

 

[JoanaPhillips]

Financial stress is awful but your plan is actually really smart. Beans and rice mode is temporary. The freedom after killing that credit card will be worth it.

One thing to add: call your credit card company. Sometimes they'll lower your interest rate if you ask. Not always, but it's worth a 10-minute phone call. Even dropping from 22% to 18% saves you money.

Also, after you graduate, look into income-driven repayment for your federal loans . Your payments will be based on your income, not the balance. That gives you breathing room while you're starting out.