Mom suggested I pay tuition with my credit card & I listened


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College was a confusing time: I took the first steps to figure out who I wanted to be in my adult life but still had no clue how to actually be an adult. Asking my parents didn’t prove to be helpful.


I was two semesters into community college. Feeling good about my progress, I wanted to take a few classes over the summer semester, but financial aid would only cover half the tuition of the three courses I wanted to take.


Unlike most of my peers, I didn’t go to college straight after high school – because I never graduated. At 23, I was a high school dropout with a GED, working odd jobs with no direction. College seemed like the natural fit to correct my course in life and I was determined to get through by any means necessary.


So I walked into the Fort Lauderdale branch of a Wells Fargo bank where I had a checking and savings account and asked if I could open a credit card. I didn’t think it would work, because up until that day I had been denied every store credit card I’d ever applied for.




I also may have been young – and very dumb – but was self-aware enough that I knew credit wasn’t smart for me at that age. Honestly, the idea of borrowing money I needed to pay back scared the crap out of me (like I said, any means necessary).


The bank teller asked if I was a college student. “Damn, I should’ve gone to school sooner,” I thought. As if I was now a part of society I’d never been invited to before. People trusted me, a high school dropout, with a credit card? I was approved that day, handed an account number on a printed piece of paper, and told my card would arrive in the mail in a week or so.


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Making the mistake

So excited by this “accomplishment,” I called my mom. I told her all about my trouble coming up with the money for school. She didn’t have the cash on hand to help and told me how dangerous student loans were but felt I could just charge the semester on the credit card.


The bank was giving me a year of zero percent interest and she swore having a credit card balance would help me build credit. In fact, she said I would always need a credit card balance to let the credit bureaus know I had “active credit.” All I needed to do was make the $25 minimum monthly payment and I’d have what I wanted: One step closer to a college degree and a new life that would guarantee I’d eventually pay it off.


But I wasn’t guaranteed anything.


I hate to blame my parents entirely. My mom was 21 when I was born and I was the second child in my family. My parents raised three kids, both working multiple jobs trying to provide for my siblings and me.


Maybe she really didn’t know the truth about carrying a credit card balance. Or maybe she just denied it so we could live a life that seemed better than my parents could afford.


Either way, a full year passed, and I never paid off that $959. Instead, I was responsible for that balance plus the 18 Annual Percentage Rate tied to it. Years later, that credit card had the highest interest rate of all the debts I had accrued in college including, a car payment and student loans.


It wasn’t until a few years ago that I paid that card off entirely.


Find out: College Financial Planning to Minimize Debt

Learning a lesson

I did finish those classes that semester and did well. I aced Intro. to Psychology, Public Speaking, and Statistics. I was winning in school but failing financially.


Looking back, I don’t regret the decision. Eventually, I earned my associate’s degree and transferred to a state college. I chose journalism as my major and began working at the school’s student-run newspaper. That led me to meet this guy who voluntarily advised the paper part-time when he wasn’t working as the editor here at


He started funneling me writing assignments for while I was still a junior in college and news editor of the paper. Those $50 assignments on the dangers of credit cards and student loan debt forced me to research the importance of a budget and cutting down my spending. Then they turned into $100 assignments and I wrote more of them more often.


One thing seasoned college students are good at is saving money. Once you’ve made it past the first few years, you prioritize your future over present pleasures like eating and drinking out. You stick to a few close friends or a significant other who doesn’t mind socializing at home with cheap booze and food.


I was also very fortunate to meet a woman who was raised differently than I and who genuinely loved me. Her parents were older and more stable when they decided to have a child. They taught her how to manage money and avoid frivolous things.


Now nine years later, she’s my wife. To give you an idea of how she views money – that 33-year-old woman still drives the 2008 Toyota Matrix her mom gave her as a hand-me-down when she was 17.


Five years after I opened that credit card for tuition, I graduated from school and landed a full-time job here at My salary was far more than I was earning as a freelancer. Between the work I was doing here and the way my wife viewed money, I learned to pay down the debt plus a $5,000 student loan and $16,000 auto loan.


Find out: How Do I Learn About Credit Cards Before it’s Too Late?

Now I give my parents financial advice

We planned out a budget, tracking everything I earned and our monthly bills and expenses. We applied the largest chunk of money in that budget to the college credit card with the highest debt, while applying only the minimum to the other debts.


Once I finally eliminated that debt, I freed up more money in my budget to pay the other debts. It made sense to go after the auto loan with the second-highest interest rate. Took that one down and focused even more of my monthly budget on my student loans.


Today I’m a certified debt management professional who writes about getting out of debt for a living. The only debt I have is on the mortgage on my wife and my condo. We use our credit cards the way many people use their debit cards. We only spend what’s in our budget on shared Visa cards that gives us cash back for spending.


Ironically, now I give my parents financial advice. And I would never tell them to charge a large sum of money on a credit card.


Find out: The 5 Dumbest and Smartest Ways to Pay Off Credit Card Debt

More credit card tips

While using your credit card to earn reward points or cashback is smart, be sure to pay off your balance at the end of the month. Also, avoid going to extreme measures to pay off your credit cards, such as taking out a payday loan.


Additionally, a financial advisor can help you navigate your credit card debt. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. (Sponsored)


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What is student loan deferment?


Student loan deferment allows you to postpone student loan payments temporarily. You can often defer student loans while you’re enrolled in school, but you might also qualify due to financial hardship or other reasons. While student loan deferment can offer financial relief, it’s not without its downsides. Your student loans might accrue interest during this period, making your loan more expensive overall. Let’s take a closer look at student loan deferment, including your options for both federal and private student loans.


Related: Quiz: Should I refinance my student loans?


Damir Khabirov / istockphoto


Paying off student loans fast is clearly the best option. But sometimes it’s just not possible. Deferment allows you to pause payments on your student loans without penalty. Unless you’re still enrolled in school, most student loan deferments are not automatic.


You’ll often need to request a deferment and get it approved by your loan servicer before you can stop making payments. Deferring student loans is usually a temporary measure until you graduate or can resume repayment for another reason. Most federal student loans are eligible for deferment if you have a qualifying circumstance.


Some private lenders will also let you defer payments on your student loans temporarily, though this varies by lender. Although deferring student loans can be the right choice in certain circumstances, it can have negative consequences. Most loans, such as direct unsubsidized loans and private student loans, accrue interest during deferment. As a result, you could face a bigger balance at the end of your deferment than you started with.


To avoid these problems, students often pursue scholarships. But they are not always possible.


Now that you know the answer to “What is student loan deferment,” it’s time to delve into the details. Before requesting a student loan deferment, consider the following questions to make sure it’s the right move for you.



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While direct unsubsidized loans accrue interest during deferment, direct subsidized loans and Perkins loans do not. If you have either of these loan types, the federal government will cover any interest charges that accrue during a deferment.


As a result, your balance won’t grow while your payments are on pause. As mentioned, however, interest charges will add up on other loan types, such as unsubsidized loans, parent PLUS loans, or grad PLUS loans.


tommaso79/ iStock


Instead of pausing payments completely, you might consider reducing your loan payments with a new repayment plan. Federal student loans are eligible for income-driven repayment plans, such as Pay As You Earn (PAYE) and Income-Based Repayment (IBR). Income-driven plans cap your monthly payments as a percentage of your discretionary income while extending your loan terms to 20 or 25 years.


If you can afford this lower monthly payment, it might be a preferable option to pausing payments completely with deferment.


Not only will you be making some progress on debt repayment, but you could also qualify for loan forgiveness if you still have a balance at the end of your term.


If you’ll be able to resume payments on your loans soon, student loan deferral could be a helpful strategy. But it’s not meant to be a long-term solution to your student loans. A deferment will end eventually, so it’s important to come up with a plan for dealing with your student loans. An income-driven plan, for example, might be a better approach in the long run.


Unless you qualify for in-school deferment, you’ll need to get approved to get your student loans deferred. The steps you need to take will depend on whether you have federal or private student loans.


With the exception of in-school deferment, you’ll need to apply to postpone payments on your federal loans. To get started, head to the Federal Student Aid Repayment Forms website. Once there, you can click on “Deferment” and fill out an application. Since there are different circumstances that qualify for deferment, you’ll choose the application that matches yours. Along with filling out this form, it could also be worth contacting your loan servicer for guidance.


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There are many issues to consider in federal vs. private student loans. Some private lenders also offer student loan deferment, though it’s not guaranteed. You’ll need to contact your loan servicer to discuss your options. You might also be able to find information on deferment options on your lender’s website.


Some common reasons for private student loan deferment are being enrolled in school, serving in the military, or experiencing unemployment or financial hardship. Note that some lenders might use the term forbearance rather than deferment.


Unlike federal subsidized loans, private student loans typically accrue interest during deferment. If you can swing interest-only payments during this time, you can prevent your balance from ballooning.


There are a variety of reasons you could qualify to defer your federal student loans.



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Direct subsidized loans, direct unsubsidized loans, grad PLUS loans, and most private student loans are automatically placed in deferment while you’re enrolled at least half-time in school and for six months afterward. This period is known as your grace period. While you’re not required to make payments, you could consider voluntarily making payments during this time.


You might also qualify for deferment if you’re enrolled in an approved graduate fellowship program, but you’ll need to request it.


Unlike other federal student loans, parent PLUS loans are not automatically placed in deferment. Parent PLUS borrowers must make payments right away unless they request deferment while their child is in school and for six months after they graduate or drop below half-time enrollment.


Borrowers who are receiving unemployment or unable to find a full-time job might qualify for student loan deferment for up to three years. If you took out loans prior to July 1, 1993, it could also be worth reaching out to your loan servicer to see if you’re eligible for additional deferment options.



AndreyPopov / istockphoto


You can defer your federal student loans for up to three years if you qualify for economic hardship. You might be eligible if you’re receiving certain benefits such as welfare or work full-time but earn less than 150% of the poverty guideline for your family size and state of residence.


You’ll need to reapply for economic hardship deferment on an annual basis.


If you’re serving in the Peace Corps, you might also qualify for economic hardship deferment for up to three years. In this situation, however, you wouldn’t need to reapply for the deferment every year.



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Student loan borrowers on active duty could also qualify for student loan deferral. If you’re on active duty military service in connection with a war, military operation, or national emergency, you could defer your student loans during this time and for 13 months after you complete your service.


Borrowers who are undergoing cancer treatment can make a Cancer Treatment Deferment Request to pause their student loans deferred while they’re undergoing treatment and for six months afterward.


The Department of Education also offers deferment options to borrowers who are enrolled in an approved rehabilitation training program for the purpose of providing treatment for vocational, drug abuse, mental health, or alcohol abuse.





Although it can provide some immediate financial relief, student loan deferral can cost you overall. Unless you have direct subsidized loans, interest will keep adding up on your student loans. Often, that interest is capitalized, or added on to, your balance at the end of your deferment. Essentially, you end up paying interest on top of interest, resulting in a costlier loan.


Let’s say, for example, that you owe $30,000 in student loans with a 5.0% interest rate on a 10-year repayment term. If you defer payments for three years, your loan will accrue $4,500 in interest charges. When the deferment ends, you’ll face a $34,500 balance, and your monthly payment will increase by almost $50.


Before requesting student loan deferment, it could be worth crunching the numbers with a student loan calculator to see if pausing your payments is worth the extra interest costs.


Pausing payments through deferment isn’t the only strategy for managing student loans. Depending on your credit rating and income, you could qualify for a lower interest rate if you refinance your student loans. Along with lowering your rate, you’ll get the chance to restructure your debt with new repayment terms.


There are benefits to refinancing student loans. Refinancing isn’t the right choice for everyone, however. If you refinance federal student loans, for example, you lose access to federal benefits, including federal deferment, income-driven plans, and forgiveness programs. Make sure you’re comfortable sacrificing federal perks before making changes to your federal student loans.


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