Normally CC debt would be considered “bad debt” but what if you finance your education with credit card? In the beginning of this year I couldn’t believe my eyes when I say almost $26K credit card debt and nothing to show. I thought I must have gone to fancy dinners, vacations and shopping sprees. After going through my past statements I had a shocking reality. I actually financed my education in the US via credit cards..My credit card statements show that I charged my tuitions, books and park fees all on my credit card and paid minimum for 2 years. Apparently I’ve accumulated $26K CC within two years! Eeek..I feel better though just because at least I feel I went into debt for something good. I would not still call it “good debt” but I would call it for good cause. As of September of this year I have $18,500. I know it is still a lot but at least I can see the light to pay it off by the end of 2009 and become debt free. Becoming debt free is a hard process. It takes being persistent and patient. I sometimes feel I am falling off the wagon but then I pull myself together and fight harder. Lately, I’ve been feeling the debt is not going down as fast as I want it to be and it is really frustrating. I just try to keep in mind that as long as I don’t add additional debt and pay thousand something dollars per month, I will become debt free. I am just trying to use simple logic and stick to my plan.
Normally CC debt would be considered “bad debt” but what if you finance your education with credit card? In the beginning of this year I couldn’t believe my eyes when I say almost $26K credit card debt and nothing to show. I thought I must have gone to fancy dinners, vacations and shopping sprees. After going through my past statements I had a shocking reality. I actually financed my education in the US via credit cards..My credit card statements show that I charged my tuitions, books and park fees all on my credit card and paid minimum for 2 years. Apparently I’ve accumulated $26K CC within two years! Eeek..I feel better though just because at least I feel I went into debt for something good. I would not still call it “good debt” but I would call it for good cause. As of September of this year I have $18,500. I know it is still a lot but at least I can see the light to pay it off by the end of 2009 and become debt free. Becoming debt free is a hard process. It takes being persistent and patient. I sometimes feel I am falling off the wagon but then I pull myself together and fight harder. Lately, I’ve been feeling the debt is not going down as fast as I want it to be and it is really frustrating. I just try to keep in mind that as long as I don’t add additional debt and pay thousand something dollars per month, I will become debt free. I am just trying to use simple logic and stick to my plan. 
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I sort of did the same thing when I let my CC balance get higher and paid off my student loans when I graduated.
Here's the problem. Higher interest rates. Sometimes a lot higher.
No flexibility. In a student loan, you can get a hardship deferral. You can at least put it off. On a credit card, interest keeps on ticking.
The only upside to a CC over a student loan is bankruptcy. But hopefully that's not an upside you care about.
Hi,
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Good luck as you continue becoming debt-free!
Chicky, are your credit cards all at 0% interest? If not, apply for several 0% interest cards on the same day, enough to get transfer the balance from the entire $26K. Madison at My Dollar Plan says to apply all on the same day so your credit rating doesn't go down (I've linked to her 0% interest card page which she keeps updated). You should probably apply for five cards to be sure you get enough credit to cover the entire $26K. It will cost minimum of $75-$100 to move over on each new card, so hopefully your new cards are high enough that you only have to use 2 or 3. I see you had a post in June that one of your cards is 11% interest, that is too high when you can get new cards at 0%!!! Some of the cards will allow you to have the new rate for 12 months, so calculate how much you will save by not paying any interest at all. I did a calculation here and if the entire $26K is at 11% it will take you 30 months and $3836 in interest to pay off (so your debt ends up being more like ~30K). If you pay $1000/month and keep the interest at 0% it will take 26 months, factoring in 6 balance transfers over that time of $100 each, you will still come out over $3000 ahead. You probably won't need to do that many balance transfers. Anyway, look at where you are now. Earning $60K!! Some people have student loans over $100K so your $26K is not much in comparison!! So I do think your debt is "good debt" but you can make it better by getting every bit of it onto 0% interest rate cards.
Chicky, that's a good way of thinking of it :) And think it's paying off already, your starting a new job and getting paid way more!
Many people say, when the economy is bad, educate yourself! It is a great thing that you are doing! I have come to the conclusion that I hate credit card debt and I just do not want to have it at all. I have tons of student loans and they are very manageable, despite their large principles. Dogatemyfinances has a point that student loans have some engines that can protect you so keep that in mind. And right now with the federal fund rate so low, government education loans come at very low interest rates. Keep up the good work Chicky!
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