Chapter 4. Credit cards and debt management

The ability to apply for and acquire credit cards is a major part of being an adult and a working professional. Having credit cards is important to initiate financial transactions, to build a credit history, to save us in a case of an emergency beyond our control, and to get out of a sticky situation where cash might not be easily accessible.

However, credit card transactions have some risks and you could end up in significant debt very easily. Several consumer reports have stated that the outstanding credit card debts in the USA ranged between 887 and 925 billion dollars. Credit card debt was the highest personal debt after mortgages until the last few decades (Only recently, it was surpassed by the outstanding student loan debt). Therefore, managing your credit cards and debt wisely is critical to becoming a more successful adult learner. 

 

How to

Adult learners returning to pursue a higher education degree need to make an effort to get rid of credit card debts (as much as possible), preferably reducing outstanding balance to zero. This will help them leverage against any unexpected financial emergency. It is advisable they use the best practices in paying down credit card debt prior to adopting educational debt to finance their education.

A good approach to debt management is to reduce the number of credit cards at hand by following these steps:

For additional assistance, please refer to Credit Cards module and Debt Management module in our series. 

Practice

Now that you know the best practices for using credit cards, think of paying it forward and discuss your experience with a friend or a family member.

 

Congratulations! You can move on to Chapter 5. Mortgage, taxes, identity theft, insurance, and retirement planning

To review the full module on Adult Learners, click here.