Suze Orman's All-Star Advice - Episode 3
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Hi, Suze. I have about $200,000 in student loan debt, $4,000 in credit card debt, about. And I'm gonna graduate in May with my second Master's Degree and I need to prioritize my debt and I need your best advice. -Miriam from the Ask Oprah's All Stars studio audience
SUZE ORMAN: What's the interest rate of your student loan debt?
MIRIAM: Well, they vary. I have some that are at 2 and 3 percent from my undergrad. And some that are, like, at 7 and 8 percent. And when I tried to consolidate them, they - the company I was working with wanted to do it all at the higher interest rate.
SUZE ORMAN: And just so I know, the interest rate on your credit card debt?
MIRIAM: It's about 18 percent.
SUZE ORMAN: In this case you would go - 'cause it's such a little amount of debt - get rid of the 18 percent debt. It's non-tax deductible; credit card debt is not tax deductible. Depending on how much money you're making, if you're making under $50,000 a year...it's tax deductible up to $2500 a year. Pay off the higher student loan interest rate first, stretch the one that's 2 or 3 percent for as long as you can, girlfriend. 'Cause a few years from now you're gonna be looking' back goin', "Wow, all I'm paying is 2 or 3 percent."
Next: Suze Orman's All Star Action Plan for this week.
SUZE ORMAN: What's the interest rate of your student loan debt?
MIRIAM: Well, they vary. I have some that are at 2 and 3 percent from my undergrad. And some that are, like, at 7 and 8 percent. And when I tried to consolidate them, they - the company I was working with wanted to do it all at the higher interest rate.
SUZE ORMAN: And just so I know, the interest rate on your credit card debt?
MIRIAM: It's about 18 percent.
SUZE ORMAN: In this case you would go - 'cause it's such a little amount of debt - get rid of the 18 percent debt. It's non-tax deductible; credit card debt is not tax deductible. Depending on how much money you're making, if you're making under $50,000 a year...it's tax deductible up to $2500 a year. Pay off the higher student loan interest rate first, stretch the one that's 2 or 3 percent for as long as you can, girlfriend. 'Cause a few years from now you're gonna be looking' back goin', "Wow, all I'm paying is 2 or 3 percent."
Next: Suze Orman's All Star Action Plan for this week.
