Wednesday, June 28, 2006

You know it's a big deal when Oprah gets involved. The talk show host has dedicated various shows to force America on a "Debt Diet," with a series of episodes featuring families that overspend to the brink of bankruptcy. As we've discussed, student loan debt is an especially major problem.

Dr. Robert Berg, chair of Argosy University/Atlanta's College of Business and Information Technology, agrees. He doesn't necessarily recommend online payday loans are a resource, however.

"Banks shower graduates with offers since their research shows that once people open an account, and are initially satisfied, they are reluctant to switch banks," says Dr. Berg. "Students discover credit card financing early on, leading to the notion of looking in a wallet and knowing you have the power to charge more than you should."

So what can a recent grad do to stay on track and be a smart earner and saver? Applying for a quick cash advance is often eschewed by experts.
"Set up a budget," says Anna Kelly, director of student financial services of The New England Institute of Art. "It's simple, easy to do, and serves as a guidepost to help young people learn to pay off debt, not accumulate more debt, and learn to save too."

The budget, she says, should include everything from rent, transportation, food, utilities, school loan payments and credit card payments to entertainment and miscellaneous expenses. Any big purchases you have to make, pay cash, says Kelly, to avoid credit card interest charges.

Amy Shaver, a loan coordinator for The Art Institute of Seattle, says that many students now try to pay down or pay off credit card debt before graduating - sometimes with no faxing payday loans - so "they can focus on paying off school loans as soon as they begin to get a regular paycheck."

If a student does run into problems paying off a loan or credit card debt, Shaver recommends contacting the lender immediately to begin to work out a payment plan. This is a smart strategy says Larry Lipner, director of administrative and financial services at The Art Institute of New York City.

"Students should pay off credit card debt first as they incur the highest finance charges, and school loans, after as they tend to have much lower interest rates," he says.

Of course, it's pressure such as this that forces many to consider the use of a bad credit payday loan. They want to be rid of credit card balances.

This entry was posted on Wednesday, June 28th, 2006 at 1:58 pm and is filed under Consumer Debt.