I'm a 23 year-old with a full time job.  I have a student loan of
$8000 which I'm just starting to pay monthly now.  I have 3 credit
cards with a total debt of around $5000, (don't ask me why I spent so
much because I spent none of the $5000! it's a favor that I deeply
regret doing now..) Anyway, that person can only pay me $250 per month
on those cards, and I don't have so much spare money to pay them off
at once.  So my question is, are these debts huring my credit rating? 
Because I'm planning to buy a car maybe 18 months later.  Should I
just leave it as it is, and let my friend slowly pay them off, or
should I pay as much as I can (I might be able to save up $1200 in two
months..but that money's taken from my new car savings..:( ) to get
rid of the debt asap? I know that many Americans have
credit card debts, am I just over-reacting?

PS- I've been carrying the debts for around 18 months, and I've made
some late payments.

Thanks in advance. :)

Start immediately to make a pack with yourself to not be late on any
payment.  They will hurt your credit.  Try to make more than the
minimum payment if at all possible.  Remember if you have a high
interest rate 8% to 18% you will save that much with every payment
that is over the interest owed.  Depending on how much you earn this
could be seen as too large an outstanding balance.  Check with your
employer to see if you have a credit union.  If you do you may be able
to borrow the money from them to pay off the credit cards.  That loan
will be paid off by payroll deduction and you won't miss any payments.
 At $250 a month it will take you two years at 12% to pay off the
$5,000.

Tviren-ga is right, credit card interest is the worst, and three cards
in overdraft do hurt your credit rating.  But it is a too common
problem, and some states or communities have counselling.  Also on the
web there are responsible sites (but also many that are in the
business for their own sake).
This was the first US site that I found, searching with:  debt advice  
http://www.debtadvice.org/

Your car in a year or two is not nearly as important as getting out of
debt problem as soon as possible.  And if you don't/until you do, car
financing will be a problem.
Good luck!

to begin with, if you want to know if you are hurting your credit
score first you have to know what your credit score is. there are
three main credit reporting agencies but you can start with one and
get a picture of where you are. go to equifax and order a product
called score power. for about 15 bucks they will email you a complete
credit report and your fico score. your fico score is how lenders
generally view you. in america you are just a number in most cases. in
the same report that tells you what your score is there will be an
explanation of why it is what it is and what you can or can't do to
improve it. there is also an interesting "what if" section where they
will predict your score based on future actions. such as what will my
score be if i pay off my outstanding debt. what will my score be if i
take on new debt for a car. things like that.

beyond that the most obvious things working against you are one: late
payments. if you have made payments more than 30 days beyond the due
date that is a reportable, recordable event and will negatively effect
your score. paying on the 10th when he payment was due on the 8th will
not. the longer your good credit history the better your score. number
two working against you is that unless you obtained credit in your
teens your credit history is short. that counts against you a bit. if
you are a short credit history and paying late don't expect lenders to
be begging to lend you money.

as you didn't indicate what you are earning, don't see how anyone can
say if this is too much debt to carry. on the other hand more than
your earnings the percentage of available credit that you are using
counts. if your credit limit is five thousand dollars and you have
taken it all, that will lower your score. the closer you are to credit
limits and total available borrowing the weaker you score will be.
applying for new credit will lower your score. so getting a new credit
card or applying for a new loan can have a negative effect. credit
reporting agencies count and report how many requests for new credit
you initiate within given time frames and too many is not a good
thing.

i won't offer you financial counsel as you haven't given enough
personal financial data to make those assesments. are three accounts
too many or not enough is a question with no real answer. the answer
is it depends. it depends on a lot of information you haven't provided
and don't need to in this kind of forum. on the other hand many people
simply don't understand credit and risk management and offer advice
that is completely and utterly if not just plain wrong than certainly
too conservative for proper or real world personal money management.
you have to be able to manage your finances not be afraid to take on
debt or make investments or anything else when and where appropriate.

from your post it appears that you have incurred this debt in your
name for the benefit of a second party. without knowing those details
i will suggest that in the future, except for very special
circumstances of necessity and responsibility - this is a bad idea. a
bad idea that generally has a sad end. as you can't unring that bell
you need to do what you need to do to protect yourself and seperately
make sure you get paid.

depending on what you do for a living and what you prospects are at
23, your situation is neither dire or alarming but what you choose to
do in the next 12 to 18 months can help or dog you for a long time.

There is some good advice above and I'll just add a bit to it.

You want to buy a car in 18 months.  By that time, if you don't use
your credit cards and pay $350 per month on them then your $5000 debt
will be gone even if you have a really high interest rate.  (that is a
mere $100 per month more than the $250 your friend is paying to you...
just remember that this person still owes you more money after the
debt is gone).

Getting rid of your credit card debt and showing 1 1/2 years of
responsible payments (no late or missed payments from here on out)
will get you a better interest rate on your car loan through a bank. 
Your student loans will not be looked on badly, they are actually
smaller loans than most people have at your age out of college
(assuming you finished).

You're not over-reacting.  Debt is a very serious issue, and it's very
good that you care about your credit... unfortunately many people do
not care so much and they pay for it their whole lives.  Don't make
any more late payments (or miss any payments) and your credit will
improve alot in 18 months.

This hasn't been mentioned yet, but you may want to call the credit
card company and ask them if they can lower the interest rate as long
as you make guaranteed monthly payments.  Most credit card companies
will do that - if you can't get the agent on the phone to do it ask
for a manager and keep asking for a manager until you get someone who
can lower your interest rate.

The faster you reduce the debt on the credit card the better - you
want your credit available to credit used ratio to be below 15%.  Once
you hit that mark (which is $750 for the $5,000 debt) your credit
score will go up substantially.

Your student loans will not impact your score in any remarkable way
UNLESS you are late on your payments.

You can get a free credit report from each of the three credit
agencies once a year - I would strongly advise you do this as soon as
possible.  Each agency tracks different information so do not rely on
a single report.  This link may help:
http://moneycentral.msn.com/investor/creditreport/main.asp

Your credit score is important, but you want to know what's behind it
(if something is on it that is incorrect get it removed/changed as
soon as possible).  Also, once you have paid off the credit card DO
NOT CLOSE THE ACCOUNT.  Cut up the card if you have to stop yourself
from using it, but as long as it is open on your credit report it
shows up as unused available credit - a good thing for your score.

Okay sexysorceress - let's fix the credit card problem first.

You're going to need to spend a few minutes on the phone with these
Credit Card Companies. Tell them "you're in a bit of trouble" and need
the accounts frozen and would really like a "more reasonable" payment
schedule.  If you're sure of the $250 a month from the "friend", offer
to pay at least that amount monthly, preferably more.

I had over $400k in debt from a failed business, worked the phones as
stated above, and my credit score remained Tier 1 (the best).  It took
two years, but all the debt was paid in full. So....not to worry about
$5k.

Continue to pay the Student Loans - and make a call to see if you can
get them refinanced at a lesser rate - you could then end up with less
of a payment.

Regardless of what happens, you cannot miss a payment.  Late is
"acceptable" - the credit reports show 30 - 60 - 90 day delinquencies
- not if you're late - meaning if you miss an entire billing cycle and
don't pay anything, you've just earned a "Scarlet Letter."

In the next 12 months, you will need to "buy" something on Credit -
meaning you'll need to get a small loan.  Try to borrow $500 from your
Bank or Credit Union on at least a 24 month term.

Don't have a Bank or Credit Union?  Go visit one and sit down with the
Manager and tell them you would like to establish credit by utilising
a small, unsecured loan.

And pay it off in 6 months.  Why do that, you ask?  Two reasons:

One, it will establish a true "line of credit."  Your credit cards and
student loans are not considered "lines of credit".  So, if you go to
a Car Dealer in 18 months and apply for a loan, you're not going to
have any "credit."

And two, paying off a loan in full (and early) does wonders for your Credit Score.

Afer paying off that $50 loan in 6 months - do it agan.  When it's
time to buy your car in 18 months, you'll have a Tier 1 Credit Score
as well.

Bookmark this site :: http://www.mynewcarpurchase.com :: and come back
for research and advice when it's closer to that new car purchase.

Your debts are most certainly hurting your credit rating especially if
you are making late payments. The good news is most any damaged to
your credit can be corrected. It is always best to leave it to the
professionals when it comes to this point. If you determine you need
the advice of a professional go to:
http://www.credit-repair-resource.com/8/credit-repair-advice.html

Hi tviren-ga,
I feel your pain.  And, everyone is going to have their 2 cents to put
in on what you should do next.  But, everyone's situation is different
and the solution may be different for you than for the next guy.  I'd
start with some debt counseling:  get some advise tailored to YOUR
needs.  I found there were some things I could do myself, like getting
a credit report (can also do that at the above site). I found
http://www.repaircredit-now.com really helpful. I got my credit report
and then contacted some debt management companies through the site for
advise.  It may take a while to get that good credit rating back, but
its worth it and doesn't have to cost a lot either.  Good luck.

Thank you all very much for your replies!  I didn't expect to get so
many extensive answers, I really appreciate all of your help :)