Understanding credit card debt

Jul 23, 2022

As a healthcare professional, your work is physically and emotionally demanding. You put in 80+ hour weeks working in high-stress environments, just for the chance to help someone get better. The last thing you should be stressing about is your finances.

Healthcare professionals like yourself often go through years of school and training to start their careers, often graduating with hundreds of thousands of dollars in student loan debt. Many turn to credit cards to cover their daily expenses during residency and postsecondary school, racking up even more debt. According to the AAMC, 13% of graduating medical students carry an average of $5,000 in debt. This rises while in training, with 26% of physicians carrying credit card debt.

Understanding credit card debt 

Of all the different kinds of debts you could owe, credit card debt is especially nefarious, as it comes with high interest rates and can quickly snowball. It also has a major impact on your credit score, which can make it difficult to do things like buy a home or car later on. A poor credit score, especially if you’re still in debt, can take years to fix.

In short, credit card debt leads to a whole host of negative outcomes — not all of them financial. Studies have found that credit card debt leads to stress, depression, and other health issues. You’re already extremely burnt out — you don’t need the added stress of credit card debt. 

Sometimes having credit card debt can feel shameful. You may be thinking to yourself, “I’m in such a high-paying career, how am I still in credit card debt?” 

It is because no one gave you the tools to succeed. 

You spent years in the classroom and in the hospital training — but when did someone teach you how to manage your money? No matter where you’re at on your journey dealing with credit card debt, just know you’re not alone. We’ll break down three steps to deal with credit card debt. 

Step one: Take stock of your financial situation 

First, take a deep breath. Know you don’t need to deal with debt alone, and there are many tools available to help you get back on track.  

First review all of your credit cards you own and determine exactly how much debt you owe. Once you understand what you’re up against, you can create a plan of action. Getting control of your money is the first step — one of the easiest ways to do this is through a budget. 

Understanding where your money is coming and going can help you: 

  • Determine spending areas you can cut back on (like eating out) 

  • Discover where you can free up money to put towards your debt payments 

There are many financial apps out there to help you track your spending automatically — or you can go old school with a budgeting spreadsheet. The AAMC has a spreadsheet specifically for residents

You may be able to negotiate your credit card bill by contacting your company. If you’re making regular payments and have held the card for a long time, you may be able to get a lower interest rate. 

Some companies also offer a balance transfer card, which has a  0% introductory rate for a set period. This gives you time to pay off your credit card debt interest-free from 6 to 20 months, depending on the offer. Just make sure you can actually pay down the balance by the time the introductory period is over or you'll face high-interest credit card debt all over again.

Step two: Make a plan 

Once you take stock of your situation, you need to make a clear plan to start paying off your bill. You will never be able to get out of debt by making minimum payments. The more you’re able to pay, the less interest you’ll pay over time and the faster you’ll get rid of your balance. 

There are two main ways to pay off your debt — the “snowball” method and the “avalanche” method. The snowball method involves paying your debt starting from the smallest balance to the largest. It’s not the most financially-efficient way to discharge debt if your larger debts have higher interest rates. Interest will compound over time, leading to a larger overall debt bill to pay. But some experts argue it builds motivation and increases the chance you’ll follow through.

Another popular option is the “avalanche” method, which prioritizes paying off debts from highest interest rate to the lowest. Consumers can save more money (and pay off debt faster) with this method. 

Which one is better? While the avalanche method pays off your debt faster and saves you money, the snowball method is more likely to keep you motivated. The best method is the one that works best for you. 

Step three: Consider consolidation 

Debt consolidation combines several debts into one monthly payment, which can often reduce or eliminate your interest charges, helping you get out of debt faster. It can also prevent your credit score from taking as much of a hit. 

As a healthcare professional what are your options when it comes to debt consolidation?

When it comes to dealing with credit card debt, you need a financial product that takes the guesswork out of the equation and gives them time to do what they do best — save lives. Most financial institutions do not differentiate healthcare professionals from other folks and because healthcare professionals carry more debt from early in their career, banks automatically think you are more risky. When infact the opposite is true.

And thats why Plannery exists..

Plannery has designed a product exclusively for busy healthcare professionals. We offer below-market rates you can’t find anywhere else, with an APR that is 50% lower than competitors. We also believe that your potential matters as much as your history, and will qualify individuals with credit scores as low as 580. Plannery takes auto deductions straight from your payroll, getting you closer to being debt free with each paycheck. You can just set it and forget it — and say goodbye to credit card debt in 36 months. 

Join our growing community.

1 Million


Healthcare workers helped.

Loaned to pay off expensive debt.

Join our growing community.

1 Million


Healthcare workers helped.

Loaned to pay off expensive debt.
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