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How to Get Out of Student Credit Card Debt

If you’re a university or college student, paying off your first credit card can be a challenge. After signing up, you may start off on the right track, only using the card for necessities and paying your bills on time. But soon the temptation of small, impulse purchases (not to mention an increased credit limit) has your debt spinning out of control.

How do you manage that debt, and more importantly, get free of it? We’ve got some helpful tips below to guide you through it


5 tips to paying off student credit card debt


  • Set up a credit card repayment plan
    • Review your statements
    • Create a budget
    • Ask for help
  • How to transfer your credit card balance
  • Debt consolidation
  • How to handle multiple debts
    • Start small
    • Focus on debts with the highest interest
    • How does debt consolidation work?
  • Other ways to reduce your debt
    • Start working
    • Pay as much as you can
    • Don’t miss payments
    • Believe in yourself

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Set up a credit card repayment plan


Review your statements

Take a thorough look at your statements and pay special attention to your outstanding balance, minimum monthly payments, and the interest rate (APR) on your credit card. These numbers form the outline of your plan: 


  • Your total amount owing, 
  • The minimum amount you’re required to pay each month
  • Amount of interest you’ll accrue while there’s an active balance on your card


Also, avoid trying to pay off your debt with minimum payments. Making the smallest payment possible every month may keep creditors at bay, but the interest you’ll continue to accumulate will only increase your debt load. Instead, come up with extra income you can use to chip away at your owed balance, or transfer the debt to a lower-interest card (more on that below).

Create a budget that works for you

Budgets come in handy as you formulate a plan to get free from debt. While you may not have extra income to work with, you can still review your spending and make adjustments, freeing up more money to pay off your card. 

Begin with necessary categories like groceries and rent, then dig deeper into less-important areas like entertainment and subscriptions. Are there cheaper alternatives that won’t put you further into debt? Download our easy-to-use student budget template to get started.

Ask for help

While you’ll get no guarantees, you can also try reaching out to your credit card provider for assistance in paying off your debt. 

They won’t be able to forgive (or even lessen) your balance, but they may be open to a conversation about lowering your interest rate or waiving any late fees you’ve accumulated. 

Ask about opening a personal loan with a lower interest rate, which would allow more of your money to go towards the principal debt. You can also see about transferring your balance to a lower-interest card or balance-transfer card. If your bank can’t accommodate that, plenty of other institutions have special offers to transfer a balance to their credit card if you switch banks.


How to transfer your credit card balance


If you’re carrying credit card debt with high interest, it may be worth looking into a balance transfer card. Shifting your balance onto one of these cards can be a huge help, as they often have limited-time, no-interest offers and sign up bonuses (usually lasting around six to ten months), but they typically only allow a certain percentage (i.e. 50%) of your credit limit to be transferred over.

It’s worth noting, however, that this method is mainly recommended for those who have a solid repayment plan and the ability to pay off their debt within the specified time frame. Once the promotional period is over, the card’s regular interest rate (sometimes as high as 19.99%) kicks in, which could undo any work you’ve done.

Visit our student personal finance guide.

Financial literacy early in life will pay dividends in your future. Learn more with Ratehub's guide to managing your money as a student.

Best ways to pay off multiple credit cards


There are two types of debt repayment strategies – the snowball and avalanche methods

The snowball method

If you’ve got debt on multiple cards, rank them from lowest to highest in terms of balance owing, then start by working on the lowest balance first. This is known as the “snowball” method.

Paying off debt, especially as a student, can feel like an enormous task, and it’s important to stay motivated and positive. Tackling the problem this way can keep your morale high and have a snowball effect, making you feel proactive and accomplished as you can see the difference you’re making happen quicker. 

While this method can be great for your mental health, in the end the smarter move is to pay your larger debts first so they don’t accumulate interest.

The avalanche method

Using the “avalanche” method, you prioritize your high-balance, high-interest debts right off the bat to prevent them from growing any further.

A reversal of the “snowball” plan, you will rank your debts from highest to lowest interest, then focus primarily on the biggest ones while making minimum payments on all the others. 

This requires a serious commitment, as you won’t get the same level of satisfaction you would by paying off your smallest debts first. It’s worth it in the long run, however, as you’ll be reducing your amount of damaging interest overall.

How does debt consolidation work?

A final possibility for those managing multiple credit card debts is debt consolidation — a process of combining all your debts into one, reducing the interest you have to pay and making your total debt more manageable. 

In this scenario, you receive a debt consolidation loan from your bank or an outside company. This is a line of credit you’ll use to pay off all your credit card debts. After that, you’ll owe the money back as one lump sum with an agreed upon interest rate. 

While this may sound like a less complex solution, it does come with important caveats. Outside debt consolidation companies often have enormous interest rates (up to 47% in some cases) which may not be worth the simplicity they offer. 

In the case of a loan from your bank, you’ll need a good credit score and, in many cases, some sort of collateral. This can be a car you own, money you have in a savings account, or an insurance policy. If they’ll agree, you can also ask your parents to co-sign. Many students don’t have any of these, but if you do, you can look into debt consolidation as an option.


Other Ways to Reduce Your Credit Card Debt


Start working

Any extra income you can bring in will help you pay off your debt. It could be a part-time job during the school year or a full-time job during the summer. If you’re physically able, construction companies are always eager to hire students during the summer and tend to pay more than the minimum wage. It’s labour-intensive, but banking that extra money while also sticking to a strict budget will give you a huge head start.

Pay as much as you can

While making the minimum payment on your card every month will keep creditors away, it won't help you pay off your debt. Paying as much as you can will take bigger chunks out of what you owe and get you debt-free faster.

Don’t miss payments

Break the habit of late fees adding to your debt load. Missing payments can do serious damage to your credit score, so make sure you pay on time, even if it’s only the minimum amount.

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The bottom line


Getting debt-free can be tough, and sometimes it feels impossible. Don’t allow yourself to feel hopeless, as those feelings can lead to more reckless spending, getting you further into trouble.

Find your last statement and highlight which expenses you needed, which ones were just for fun, and which ones you regret or could do without going forward. Eliminate any in that last category.

Build a budget (download our template here) and start by entering your income and the expenses from your last credit card statement.

Lastly, call your bank and ask about a personal loan and balance transfer cards, or compare cards here.

Stay the course, and know that while climbing out from under debt isn’t easy for anyone, you’re finally taking control over your financial well-being. Use our tips above to help you on your way, and share your own in the comments below.