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WORK & MONEY NOT ALL DEBT IS CREATED EQUAL Published November 25, 1996 Other Columns by Beth Kobliner

Here's something to consider if you have credit card and student loan debt. Not all debt is created equal: The interest rates on student loans are usually substantially lower than the interest rates on credit cards. Most student loans have interest rates of about 8 percent, while the average rate on credit cards is closer to 18 percent. So when you're paying off your debt, it's important to pay attention to the interest rates involved, and set your priorities accordingly; your high-rate debt (like your credit cards) needs to be paid off faster than your low-rate debt (like student loans). One good trick to consider is extending the term of your student loans -- paying them back over twenty years, for example, instead of ten. With a longer term, your monthly payments will be much lower; this will free up some cash, which you should use to pay off your credit card bills. Once you've gotten rid of your credit card debt, go back to paying off your student loans at their original levels. Beth Kobliner is the author of "Get a Financial Life: Personal Finance in Your Twenties and Thirties," published by Simon & Schuster in May. In 1994 and 1995, Kobliner was selected by TJFR Business News Reporter as one of the country's most promising financial journalists under the age of 30. Kobliner is currently a contributing writer for MONEY magazine and is a regular commentator on NPR's "Sound Money." She lives in New York City with her husband and their daughter. © 1996 Beth Kobliner, All Rights Reserved