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9009 West Loop South, Seventh Floor, Houston Texas
1-866-889-9347 |
CCCS of Baton Rouge
Regional Headquarters - 615 Chevelle Court, Baton Rouge Louisana |
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College Students Racking Up Credit Card Debt |
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 Walk through any university plaza and you will see tables full of freebies – t-shirts, hats, calculators, backpacks – all free for the taking and requiring nothing more than a signature on a credit application. Many students, thinking they would never be approved anyway and needing a new backpack, sign the dotted line. To their surprise, most are approved with limits as high as $2,000. For a student with little or no experience with how credit cards work, this newfound financial freedom can quickly turn into financial noose.
In the mid 1990s, credit issuers began to realize that in order to expand their business, they had to reach out to new markets and found a ready and willing audience on college campuses. So willing in fact that according to a Nellie Mae study, the percentage of students holding at least one credit card has risen 24% since 1998. Additionally, 92 percent carry at least one credit card by their sophomore year and 21 percent of undergraduates who have cards are carrying balances between $3, 000 and $7,000. Students double their average credit card debt and triple the number of cards in their wallets between the time they arrive on campus and graduation.
In order to help avoid credit problems, college students should:
- Read the fine print and understand what their responsibilities will be. Shop around for the lowest rates and annual fees.
- Understand that credit cards are not free money. The charges will come due whether or not a student has the money to pay for them.
- Think long-term and use their credit cards to build a healthy credit history – one that includes on-time payments and reasonable balances.
- Understand that a good credit history directly affects their success after graduation since many companies are using credit reports as a measuring tool to determine employment possibilities, insurance companies regularly use credit histories to determine policy issuance, and new car, home and business loans will all be adversely affected by a poor credit history.
- Consider using pre-paid credit cards or debit cards to keep spending in check.
- Ask for help when needed. Don’t wait until even the minimum payment is already out of reach.
When used properly, credit can be a tremendous asset. Learning the difference between a want and a need is not taught in the classroom, but one of the most valuable lessons a college student can graduate with.
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CCCS, A Division of Money Management International
Regional Headquarters – 615 Chevelle Court, Baton Rouge Louisana
Corporate Address - 9009 West Loop South, Seventh Floor, Houston, TX 77096 |
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