Paying Off Credit Cards and Student Loans Can Compete for Priority With Comfortable Lifestyle
(U-WIRE) AUSTIN, Texas - Ruben Guardiola considers himself like the typical person just out of college. He owes money on credit cards with annual percentage rates (APRs) ranging up to about 21 percent and has to pay back thousands in student loans.
But unlike some of his peers, Guardiola is working out a plan that hopefully balances paying off debt and purchasing nice items now with having a comfortable nest-egg to fall back on later.
"Once I started working full time, my wife and I sat down and said, 'Where am I getting hit the worst?'" said Guardiola, who went on to work at CyberTrader Inc., a direct-access broker specializing in electronic trading, after ending his time as a full-time college student in July 2001. "The interest rates on student loans are only 6, maybe 10 percent. I have a credit card with a 21 percent rate, so I'm trying to eliminate high-interest debt first."
Graduates Torn Between Spending and Investing
As recent graduates begin receiving their first real paychecks, and the time rolls around for them to decide between enjoying their first new car and a fancy apartment or putting money into a 401(k) retirement plan, the graduates have to weigh which luxuries are needed and which are merely wanted, says Karrol Kitt, an associate human ecology professor at the University of Texas-Austin.
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