Why a 26-year-old with $350,000 in student loans won’t use a credit card

Going to medical school is expensive, especially in New York. For 26-year-old Alexandra Capellini, who is currently completing a year of research between her third and fourth year at the Icahn School of Medicine at Mount Sinai, every dollar counts.

Capellini expects to graduate with more than $400,000 in student debt, including $130,000 from undergraduate. And she predicts it will take “decades” to pay off, even if she gets to the point where she’s making more than $200,000 a year as a pediatric oncologist, she told CNBC Make It.

With this in mind, Capellini makes sure to live within her means. Normally, she lives entirely on her loans and preloads money for her living expenses onto a debit card. Currently, she earns a $28,000 allowance, which gives her some money to spend each week. Also, since she is not taking any additional loans this year, her parents are helping her extend her allowance by covering her monthly rent of $650.

Although she already faces the prospect of paying off a loan in her 40s and beyond, Capellini is reluctant to open a credit card and potentially take on more debt, even if it would make her life easier in the short term.

“[My parents] basically told me “you can open a credit card when you have a stable, consistent income and can pay it off in full every month without needing to lean on us,” Capellini says. “And I haven’t been to that place yet.”

Alexandra Capellini is a student at the Icahn School of Medicine at Mount Sinai

Mickey Todiwala

She says getting a credit card is “one of the most important things I look forward to when I start earning residency pay.”

In addition to being able to start accumulating credit card points from money spent on travel and groceries, Capellini has another reason for wanting to shift his spending from debit to credit: peace of mind.

“Mentally, it would be nice not to have to be so hyper aware of the exact dollar amount I have in the bank right now,” she says. It will also be easier to pay your bill at the end of the month rather than having the money deducted from your account with each purchase.

But until she has a paycheck, Capellini says she will remain committed to her tight budget and focused on debits.

“I don’t count the pennies, but I’m hesitant to even think about adding credit card debt,” she says. “I can’t even tackle what I already have.”

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