Help Students Stay Away From Student Credit Card Debt

As a college student, you may agree that life is not easy all the time

. Aside from the challenges of dealing with peers and professors, passing exams, and keeping up with the daily school activities, financial issues can also add to the pressure. Many college students today find themselves confronted with the burden of debt on their shoulders.

According to surveys, students with bad credit all have one thing in common unpaid student credit card debt. According to the Consolidated Credit Counseling Services Inc. 40% of college students get at least one student credit card on their freshmen year, while 20% apply for student credit cards while theyre in still high school.

True, getting approved for a student credit card is fairly easy and owning a student credit card does have its advantages. Unfortunately, most students with credit cards dont know how to handle their student credit cards correctly. A study conducted by Nellie Mae, a leading student loan lending company, reveals that in 2001, 83% of undergraduate students own a credit card- each with existing balances that amount to $2,327 on average. Imagine how difficult it could be for a student to pay off a credit card balance of $2,000 in full.

Surviving Student Credit Card Debt

Are you a student yourself? The best thing to do to avoid student credit card debt is to handle your student credit card with caution. Financial experts agree that student credit cards can be a great tool in building your credit history. But dont let the convenience of a student credit card lead you to overspending and eventually, bad debt.

What every student must realize is that each time they use their student credit card for a purchase or for a charge, he or she has the obligation to pay it back on time. Other students may reason out that they have the option to pay only the minimum payment required and carry over their balance for the next billing period. But such reasoning can easily lead to unmanageable debt. Remember, if you carry over your balance from month to month, you incur the high interest rate charges and you increase the risk of building up debts in your account. That is why, all credit card holders not only students are advised to pay off their monthly balances in full at all times.

Parents also play a big role in helping young people understand their obligations as new credit card holders. In choosing a student credit card, you can work with your teen-ager and guide them with their choice. You may share your own experiences as a credit card owner as well. You may also recommend a particular student credit card that you think offers the better deal. Encourage your kids to read the credit cards Terms and Conditions in full so that they can personally understand what theyre signing up for. Emphasize the importance of building a credit history. Teach your kids how they can take care of their credit and keep it in a good or excellent status.

by: Samantha Wilson

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