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Studying for a degree can be very expensive, so it’s no wonder that nine in 10 students have a credit card. When used responsibly, student credit cards can help students build their credit scores. But, did you know that of those Canadian graduates who have a credit card, nearly 25% retain a balance every month? In fact, the average graduating student can expect to leave university with 3.7 credit cards and of those who graduate with an unpaid balance, the average debt is $2,224.

If you’re in this situation, saving for your future can seem like a daunting task, especially with high-interest credit card debt. However, if you’ve just graduated and are entering the world of full-time work for the first time, now’s the perfect time to start working towards a debt-free future.

Try using one of these strategies:

1. Consolidate your debt

Carrying debt on a number of different credit cards can be hard to manage. In this situation, it’s worth thinking about consolidating this debt. Getting a personal loan or line of credit with your bank or a peer-to-peer lending company is a good option as is a balance transfer credit card.

Once you’ve graduated, you have a lot more options with the credit card you choose, and balance transfer cards are specifically designed to offer competitive rates in order to attract new customers. If you’re earning $35,000 or more, the MBNA Platinum Plus MasterCard is a good example. It offers a 0% interest rate on balance transfers for 12 months. It’s important to be aware of the specific terms and conditions of cards like this as the low rates are generally only applicable for a promotional period of time. But if used carefully, balance transfer cards can be a very effective tool in reducing debt.

The best thing about consolidating debt is that you can minimize or even remove interest charges, albeit often only for a limited amount of time. This means that more of your monthly payments go toward clearing your balance rather than just covering interest charges.

2. Use the debt snowball method

Seeing results quickly can be a great motivator to continue working hard to reduce credit card debt so this technique can work really well. With the debt snowball method, you aim to pay off your smallest debts first and then move towards the larger ones. By making minimum payments on your other debts, you can focus on making the largest payments on your smallest debt to clear it as quickly as possible. Once you’ve paid off that creditor, move onto the next smallest debt and repeat until you’re debt free.

This method starts to show results faster than other strategies. Choosing to pay off smaller balances first reduces the number of creditors you have much more quickly. And it can help keep up positive momentum. However, do keep in mind that the interest charges on your larger debts will continue to accumulate. If they have particularly high-interest rates, you may want to consider the next option.

3. Start a debt avalanche

This strategy is effective in reducing interest charges by prioritizing paying debts with the highest interest rates first. To do this, make the largest payments on the debt with the highest rate of interest while only paying the minimum required on your other debts. Once you’ve cleared the highest interest debt, move to the next highest until you’ve paid off all of your balances.

This method is best suited for those who are really committed to paying off their debt. But it may take time to feel you’re making progress if you carry a large balance on a high-interest credit card. Still, it’s particularly efficient in the long term as you’ll end up paying less interest overall.

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