How to Pay Off Credit Card Debt for Med Students, Residents and Fellows

pay off credit card debt

  • Managed poorly, credit cards can destroy your credit. Use them only if you’re sure you can pay off the balance every month, or for emergencies.
  • The amount of interest you pay and your minimum payments make a huge amount of difference to how much debt and interest you will have. Look for the right card to keep interest rates to a minimum.
  • You can take steps right now to significantly reduce how much interest you’ll pay on your credit card debt by maximizing your repayments, or consolidating and refinancing.

We get it, because we’ve been there. You have an incredibly busy schedule. You’re putting in 80+ hour weeks as a medical student, resident, or fellow. For us, speed and convenience are crucial, so when it comes to paying for anything,  we naturally reach for the credit card. 

Between night shifts, alarms, and exams, you don’t have time to figure out what the “best” way to spend is. So long as you make your minimum card payments, everything will be fine, right?

Sorry, but no. Credit card debt plagues medical trainees. 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.

It’s essential to stay on top of your credit card. We know you don’t have time, and that’s okay—just a few minutes and you can get a better interest rate and automatically make the most of your repayments. You’ll have one less thing to worry about, so you can better focus on patient care.

Why Does the Amount of Interest I’m Charged Matter So Much?

You’ve seen APRs and interest rates next to student credit card offers—12.99%, 14.5%, 21.9%—but it’s difficult to translate those numbers into the actual impact it will have on your bank account. 

The truth is that the amount of interest you’re charged makes a massive difference to how much you need to repay and how much you will have leftover at the end of each month. You want to avoid eating ramen for every meal!

You need to know the impact, so let’s break it down.

We’ll assume you have $10,000 in debt on your credit card and that you can afford to pay $250 every month.:

Loan amount Interest Rate Time to pay off Total Interest Paid Total Paid
$10,000 11.15% APR (average rate) 4 years, 3 months $2,560 $12,560
$10,000 18.00% APR (average rate) 5 years, 2 months $5,386 $15,386
$10,000 23.99% APR (high interest card) 6 years, 10 months $10,306 $20,306

Headline: Compared to the lowest interest rate credit card, repaying the high interest credit card will lead to you repaying the debt for an additional two-and-a-half years, and you’ll pay four times as much in interest!

Try some numbers for yourself to see how much of a difference interest rates make.

I Should Look For A Low-Interest Card, Anything Else I Can Do?

Yes. The very best thing you can do, regardless of how much interest you’re paying, is to increase the minimum you repay each month. Let’s see what happens when you squeeze another $100 out of your budget and put it towards your credit card debt, repaying $350 a month against that same $10,000 balance.

Loan amount Interest Rate Total Interest Paid @ $250 per month Total Interest Paid @ $350 per month  Total Savings over life of loan
$10,000 11.15% APR $2,560  $1,676  $900!
$10,000 18.00% APR $5,386 $3,156 $2,200!
$10,000 23.99% APR $10,306 $4,972 $5,000!

What If I Refinance My Credit Card Debt?

Refinancing your credit card debt can be a great option to lower your interest rate, reduce your monthly payments, and simplify your life. 

You can search for a personal loan with interest rates less than your credit card. This will reduce the amount of interest you end up paying, saving you money.

Reducing your monthly payments can benefit you by freeing up extra cash, to make sure you’re making it to the end of the month.

In a Medscape survey from 2020, 42% of physicians report having more than 5 credit cards. If you have multiple credit cards with debt you can pay them all off with refinancing, so you’re only making a single payment each month, saving you time! 

I’m Incredibly Busy, So What Should I Do?

Here we go:

  1. Whenever you can, pay more than the minimum payment. Squeeze an extra $100 out of your budget every month and put it towards your card debt. This will have a massive impact.
  2. If you’re so busy you forget to make payments on time, a great safeguard is to go to your credit card provider’s website, look at the minimum monthly payment, and set an autopay amount of $100 or $200 more.
  3. Get an app, text or email notification of your credit card balance on a daily basis. This will help you stay aware of how much you owe, and help you be mindful of future purchases.
  4. If you want to consolidate your credit card debt, consider refinancing to simplify your life, and reduce your payments. 
  5. Ask for help! We have concierge staff available 24 hours a day, 7 days a week.

We know how challenging it is to manage your debt as a doctor-in-training—we’ve been there. It’s so tempting to just spend “that little bit more” on a credit card, after all, you deserve it for all the time and effort you’re putting into your studies. 

Trust us, we’re not saying you have to live like a monk! But, it’s much (much) better to get it under control early so you’re not struggling with it years down the line. 

We’re Here For You 

Here at Panacea Financial, we were formed for doctors, by doctors, to provide the financial support you need. We understand your challenges—inadequate cash flow, loan debt, huge upfront costs—and we know how to help. We’ll support you through your entire journey from student, to resident, to practicing physician.


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