Managing Credit Cards, Student Loans and Other Debt

Managing Debt

Whether you just graduated or have been practicing for a while, how you manage your debt will be a key factor in your success as a Doctor of Chiropractic. That's because paying off credit cards, auto and home loans, and student loans responsibly will help you secure financing for your facility and practice equipment. Plus, careful debt management can provide you with the good credit history you need to start your practice on sound financial footing.

Read on for tips on managing your debt and online resources that can assist you.

Using Credit Cards Responsibly

There are many valid reasons for using a credit card. It can be helpful to use in emergencies, to track business expenditures, or to cover some expenses while you wait for payment from third-party insurers. But, the danger is using credit cards to pay for a lifestyle that is in excess of your income. Be wary—overuse of credit cards can get you in trouble if you are not able to pay off the balance each month.

Protect your future by protecting your credit standing. Use credit cards wisely and look for a card with the lowest annual fee and fixed interest rate. The article “Your Credit Score,” also on NBAC’s site, may be helpful information.

Loan Repayment

Student loans can come from a variety of different sources and have different terms and details. But they all have one thing in common—they must be repaid. Repayment usually doesn't start until after graduation. Stay informed on the details of your loans so you will be prepared to begin repayment.

Know Your Payment Options

Depending on the source of your loan, there may be several options for repayment including:

  • Standard repayment – a fixed monthly amount usually over a 10-year period
  • Graduated repayment – lower monthly payments initially and increasing gradually over a 10-year period
  • Extended repayment – allows certain borrowers to extend the repayment period up to 25 years
  • Income-sensitive repayment – monthly payments based on the borrower's annual income
  • Deferment – allows eligible borrowers to postpone payments for a specific period of time
  • Consolidation – lowers monthly payments for borrowers with either high monthly payments or loans from multiple lenders

Know When Repayment Begins

Most student loans specify a grace period, which generally is one year following graduation. But the grace period may vary on different loan programs and should be specified in your promissory note. If you are unsure, call or e-mail the lender and ask for loan disclosure and a repayment schedule. The loan disclosure will tell how much you've borrowed and what the monthly payments will be under a standard repayment plan.

Student Loan Resources

For more detailed information, check out some online student loan resources such as:

SallieMae.com – student loan account access and helpful information
FastWeb.com – articles on managing financial aid repayments
NSLP.org (National Student Loan Program) – online references and account information

Helpful Debt Management Resources

If you are having difficulty managing credit card spending or with debt in general, refer to some of the resources below:

MotleyFool.com – Personal finance and credit section including a debt reduction workbook
Mastercard.com – Credit and debt management tips
CreditTalk.com – Money and debt management tips from MasterCard
PracticalMoneySkills.com – Guidance on debt management, credit cards, budgeting and more 

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