How to take control of credit card debt while you’re in university or college

Plan your finances and stick to your budget.

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If you’re a college or university student with credit card debt, you’re not alone. Many students use credit cards to pay for school books and everyday costs such as food, dining out and social drinking.

Clearing your debt may seem overwhelming, especially when you’ve got student loans. But with decent budgeting management, you can be debt-free quicker than you think.

Evaluate your credit card debt

Before you take control of your debt, you need to understand exactly how much you have. Take a pen and paper and write out:

  • Which credit card provider(s) your debt is with.
  • How much money you owe on each card (if you have more than one card).
  • Your minimum payments.

For your convenience, we created a repayment calculator to help you find out the amount you’ll need to pay.

Disclaimer: While we’ve made every effort to ensure the accuracy of this calculator, results are for your general information only and not intended to reflect your specific circumstances. Do your research before applying for any credit card or signing any contract.

Scotiabank Value Visa Card

Scotiabank Value Visa Card

12.99 % APR

Purchase interest rate

Eligibility criteria, terms and conditions, fees and charges apply

Scotiabank Value Visa Card

Apply today and enjoy a 0.99% introductory interest rate on balance transfers for the first 6 months when your new credit card account is opened by 31 October 2019.

  • Purchase interest rate: 12.99%
  • Cash advance rate: 12.99%
  • Intro balance transfer rate: 0.99% for the first 6 months
  • Standard balance transfer rate: 12.99%
  • Annual fee: $29
  • Credit rating: 650+ recommended credit score
  • Minimum income: $12,000
  • Minimum age: Age of majority in the province/territory of residence
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Create a budget

Creating a budget will give you an overview of where you spend your money. Once you have your budget set out, adjust and minimize unnecessary spending – but don’t nitpick when doing this; focus on the long term. Remember that you’re trying to pay off your debt as soon as possible. Once you’ve got your debt paid off, you can treat yourself once in a while again.

Design a plan that fits your finances

Everyone’s financial situation is unique. Someone could have higher debt than average, while another could have a lower income. Whichever group you fall into, you still have options.

Here are some ways you can pay down your debt faster:

Apply for a balance transfer credit card

This type of card comes with a low or 0% intro APR period on balance transfers, meaning you save money on interest, which can help you pay off your debt faster. For every transfer you make, there’s likely going to be a balance transfer fee of 1-3% of the transferred amount. Keep an eye on this fee and the balance transfer offer if you’re set on getting a balance transfer credit card.

You’ll also want to figure out how much you can transfer onto the card. If you have multiple balances you want to consolidate, you’ll likely need a higher credit limit than if you were just transferring one balance. As an example, some providers only let you transfer up to 70% of your credit limit.

Make use of a debt consolidation loan

A debt consolidation loan could be another potential solution, especially if you have higher balances or if you owe money to multiple accounts.

If you opt for a debt consolidation loan, you can combine your debt from all accounts into one monthly payment. This could potentially lower your monthly interest payments and help you pay off your balance faster.

Use the debt snowball method

The snowball method is a debt-reduction strategy designed for those who owe money to more than one credit card account. This strategy can be motivating since you’ll slowly reduce the number of debts that you have. This is how it works:

  1. Start making minimum payments on all debts, except the smallest.
  2. Pay as much as you can on your smallest debt and repeat until you pay it off.
  3. Move on to the next smallest debt while still paying the minimum payments on your remaining debts.
  4. Once you pay off this debt, move on to the next smallest until all debts are paid off.

Make weekly payments when possible.

If you’re receiving a weekly or bi-weekly paycheque, consider switching to weekly payments instead of monthly. To start off, divide your monthly payments by four. For example, if your monthly payment is $400, you have to make a weekly payment of $100.

The logic behind this is that most months have four weeks, while some have five. For the months that have five weeks, you are actually skipping one potential weekly payment when you pay $400 instead. With weekly payments, you would pay $500. That’s four weeks skipped in a year.

Plus, interest is calculated daily, which means you’ll save a little on interest by paying off the balance weekly instead of once a month.

PaymentsMonthlyWeekly
Monthly debt$400$100
Total yearly payments$4,800$5,200

Seek help.

If all else fails, seek help. Friends and family should be your first choice, but you can also reach out to professionals who can help you out. You may be surprised how far asking can get you, even if your pride takes a hit.

Negotiate with your creditors.

Most of the time, you can negotiate your credit card terms, interest rates and payments. But this typically depends on the credit card provider and your personal situation.

The most important factor here is timing. You’ll have more success if your credit score is good and you’re not behind on your payments. If your provider won’t budge, you can say you’re planning to move to another provider for better terms.

But if you’re already late on your payments, or you know you won’t be able to make your payments on time, it’s typically best to be honest about your situation.

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Compare balance transfer credit cards

Name Product Welcome Offer Purchase Interest Rate Balance Transfer Rate Annual Fee Credit Rating
Offers a 0.99% introductory interest rate on balance transfers with 0% transfer fee for the first 6 months. Ends 31 October 2019.
12.99%
0.99% for the first 6 months (then 12.99%)
$29
650+ recommended credit score
Save on interest by consolidating your higher-rate balances and get a low 12.99% purchase interest rate.
Receive 5% cashback (up to $300 cashback) in the first six months.
19.99%
1.99% for the first 6 months (then 22.99%)
$99
Good, Excellent
Offers 1.99% balance transfer rate in the first 6 months to new cardmembers. No balance transfer fee upon application.
Earn 2.5% cash back (up to $150 cash back) in the first three months.
19.99%
1.99% for the first 6 months (then 22.99%)
$0
Good, Excellent
Offers 1.99% balance transfer rate in the first 6 months. No balance transfer fee upon application.
Get 1.95% interest rate on balance transfers for the first six months. Valid within the first 30 days of account opening.
19.95%
1.95% for the first 6 months (then 19.95%)
$0
650+ recommended credit score
Earn 4% Money-Back Rewards in three categories of your choice such as groceries, dining, petrol and more. Ends 31 October 2019.
Offers a 3.99% balance transfer intro rate in the first nine months to new cardmembers.
12.99%
3.99% for the first 9 months (then 12.99%)
$20
Good
Offers a 3.99% balance transfer intro rate for nine months to new cardmembers.
Offers a 3.99% introductory interest rate on balance transfers with 0% transfer fee for the first 6 months. Ends 31 October 2019.
16.99%
3.99% for the first 6 months (then 16.99%)
$0
650+ recommended credit score
Save with a low interest rate and no annual fee.
Receive 2,000 bonus AIR MILES® when you spend $1,500 within the first three months of membership.
19.99%
1.99% for the first 6 months (then 22.99%)
$65
Good, Excellent
Offers 1.99% balance transfer rate in the first 6 months. No balance transfer fee upon application.
Earn up to 800 AIR MILES bonus miles with minimum spend of $1,000 in the first three months. Ends 31 October 2019.
19.99%
1.99% for the first 9 months (then 22.99%)
$0
Good
Enjoy AIR MILES on your every dollar spent and build a healthy credit history.
Get up to 5% cash back with minimum spend of $2,000 in the first three months of card membership. Ends 30 November 2019.
19.99%
1.99% for the first 9 months (then 22.99%)
$0
Good
Enjoy cash back on your every dollar spent and build a healthy credit history.
Receive 2,400 AIR MILES® when you spend $3,000 within first three months of membership.
19.99%
1.99% for the first 6 months (then 22.99%)
$299
Good, Excellent
Offers 1.99% balance transfer rate in the first 6 months. No balance transfer fee upon application.

Compare up to 4 providers

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Create better financial habits

The best way to pay off your debt and avoid it in the future is to improve your financial habits. This includes:

  • Sticking to your budget. This should be a general guide, which you can update or adjust as your needs and income fluctuate.
  • Setting up automatic payments. If you’re busy and you can’t keep track of your due dates, set up auto payments or reminders. This can help you avoid unnecessary fees and interest charges.

Bottom line

When you’re in university or college, it’s easy for your credit card debt to pile up. You’ve got lots of expenses and not many students have the experience and the necessary income to get through debt-free.

However, by making a budget and a plan of attack, paired with a balance transfer credit card, a debt consolidation loan or frequent payments, you could pull it off and find yourself debt-free in no time.

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