Who knew? Women also face a gender debt gap.

That’s because women pay more for their debt than men do and women have more of certain types of debt than men do. For example, starting with student loan debt (the first debt many of us take on), 2015 graduates averaged $35,051 in student loan debt. But get this — because the average woman has a gender pay gap in her first job post-graduation, she has less income to pay off those loans. So when you start looking at that debt four years out, the guys have paid off over 7% more, on average (I know, I’m fired up about it too.)

While student loan debt can seem scary, in itself it’s not necessarily a bad thing. There is such a thing as good debt (in most cases, we benchmark it as anything at double digits APR or lower), and most student loan debt is in that range. So student loan debt is not emergent, and shouldn’t stop you from starting an emergency fund or investing in your 401(k).

If you can, however, you should avoid taking on “bad” debt, the stuff with scary-high interest rates (read: credit card debt). Our rule at Ellevest is that if you can’t afford to buy something without putting it on your credit card, you can’t afford to buy it. Use credit cards only for convenience, and always pay them back in full and on time. If you’re religious about the second piece of that, it can help build your FICO score, too.

(Sidenote: there are some folks out there who advise people — and for some reason, women in particular — to build an emergency fund before paying off their credit card debt. We believe this advice is...well, just plain wrong. An emergency fund is three-to-six months of living expenses, held in cash in case of, you know, an emergency. That cash earns you about 0%. In contrast the borrowings on a credit card cost you 16.81% on average. I know, wow, right?)

Maybe it makes more intuitive sense if I just say, “You owe some money, and it’s costing you a lot. You have some money. So pay off the money you owe.”

Hold on, you may say, what if an emergency hits and I don’t have an emergency fund? Well, you can borrow money on your credit card then if you must. Hold on again, what if the bank cancels my credit card the moment I have an emergency? (I was the CFO of a large bank; believe me, they likely won’t. They live for that kind of thing.)

What’s a wanna-be-debt-free woman to do?

If you have credit card debt outstanding:

1. Figure out what interest rate you are paying on your credit card debt.

Take that % and multiply it by the amount outstanding. That’s what you’re paying the credit card company each year for the privilege of borrowing money from them. And that number comes out of what you have left over after you pay taxes, so the “real cost” (i.e., how many days or weeks a year you have to work to pay the credit card company for the privilege) is even greater.

Just to motivate yourself — and perhaps seriously jolt yourself — calculate how many weeks a year you are an indentured servant to the credit card companies:

Let’s say you have $15,000 in credit card debt with a 16% APR, and make $85,000 per year before taxes. That’s $2,400 you’re handing over to the credit card company before you even touch your balance. Oh, and 2.25 weeks of your life you’ve worked for them and not yourself.

Another way to think of this is if you take that same balance and pay $300 per month, it will take almost seven years to pay it off, at which point you will have paid the credit card company close to $10,000 in interest alone. You get the point. Keep your money for you, don’t fork it over to the bank.

2. Now let’s try to save you some money.

There are numerous credit card companies out there that will charge you 0% — that’s right — 0% if you transfer your balance to their card. Their belief is that if you do so, before you know it you’ll be charging new stuff and paying their interest charges, and they’ve got you as a customer. Profitable for them…not so great for you.

So transfer that money and then no more charging your purchases. Just start paying the balance outstanding down; the interest payment you’re saving from the high-cost credit card you just transferred from should all go to paying down your credit card balance.

3. If you have more than two credit cards, cut up the remainder of them.

One should be enough, but sometimes stuff happens — one of them gets lost, there is a bank glitch, etc. So I carry two.

If you have student loan debt outstanding:

1. Are your payments on auto-pay?

Double check — this will typically save you 0.25% in interest expenses, not to mention taking one more thing off your to-do list.

2. Have you been paying on time?

Then call your lender and ask for your interest rate to be reduced. Just ask. Try this every three to six months. We've found that sometimes they will and sometimes they won’t. But it doesn’t hurt to ask.

3. If your credit is good, see about getting your loans refinanced.

Start-ups such as Earnest and CommonBond offer tech-friendly ways to lower your interest rates.

4. If your student loan debt is preventing you from achieving other financial goals, cut down on spending.

I know, I know. Not what you wanted to hear. But once you get going, it can be rewarding, even addicting to watch your balance go down. Cook at home one more night a week. Take a “stay-cation” instead of a tropical one. Try public transportation instead of Uber for a month. It will be so worth it.

If you have other debt / personal loans

Let’s be real — credit cards and student loans aren’t the only sources of debt most of us have. We have mortgages, cars, and those pesky small personal loans necessitated by a pressing need every once in a blue moon. Here’s how to think of those:

1. Mortgages

According to a study by Urban Institute, of more than 60 million mortgage originations from 2004-2014, single women pay higher rates for their mortgages on average than single men do.

Yes, part of this has to do with the gender pay gap and weaker credit scores. But that doesn’t explain all of it. And it definitely doesn’t explain why women have higher loan-to-value ratios, on average. (That’s a fancy way to say you’re given a bigger mortgage loan for the same home as the guys.) What’s more is we women are actually better at paying back their mortgages.

What to do? If you’re thinking about buying a home, we’ve got you covered here. Consider how much home you can afford, and the trade offs of buying now versus saving for a bigger down payment.

Already have one? When was the last time you reviewed it? Consider refinancing. My husband and I make it a habit to check into whether we can refinance (i.e., replace the mortgage with a lower-rate one) every couple of years. While there can be an up-front cost to the refinancing, and you have to put some time into it, it can be worth it if you can lower your interest rate enough.

2. Auto loans

If you can manage it, buy a car you can afford, not one you have to borrow to pay off. And don’t fall for one of those “0% down, 0% APR for 12 months” ads. Dealerships only do those because they know they’ll be profitable...for themselves...in the long run. Look into certified pre-owned options that won’t break the bank. And if you absolutely need an auto loan because your Vespa’s just not cutting it anymore, aim for the lowest rate possible.

3. Personal loans

This is another type of debt not to rush into. But if the purchase is substantial enough and necessary, personal loans can be a better option than credit cards. Paying for a design class to increase your marketable skills? Refinancing high interest debt? Those are examples of times where it’s OK to take out a small personal loan. Check out pave.com if you’re looking for a reasonably low interest rate and a straightforward lending process.

So that’s the rundown on debt. Whatever type you have, a good rule of thumb is to avoid spending more than 36% of your gross income each month paying it off, mortgage debt included. In a perfect world, it’s much less than that. Having more impacts your credit score, your ability to borrow in the future, and puts you in danger of treading water.

The short version: Love the good debt, purge the bad debt, and start chipping away at those balances.

Disclosures