Super Smart Ways For College Students To Evade Credit Card Debt

Photo courtesy of Josh Kenzer from flickr.

A financially secure future awaits students after finishing college. However, the rising fees of tuition, accommodation, library, commercial and research works in college often compel students to fall into deadly debt traps and they incur huge credit card debts.

The statistics of Sallie Mae, one of the nation’s largest student loan providers unveils the alarming fact that currently college students in the U.S. carry more than $3,000 in credit card debt. The report further claims that 84% of college students possess a credit card and half of them have at least 4 credit cads each. 21% of them have a balance between $3,000 and $7,000 and 19% of college seniors have balances above $7,000. 68% of the students made the purchase in spite of knowing that they don’t have the balance to pay the bills.

Education expense is not the only reason behind these outstanding figures of student credit card debts; students have also been squandering money over food, clothes, and cosmetics as well. Opting for a credit card debt consolidation can help a lot in this regard and can ease or eradicate the debt burden considerably.

The Significance of Credit Score

Your history of using credit cards is assembled into a credit report and graded with a credit score. Lenders, employers, landlords, insurance companies, and even utility service providers all take into consideration your credit score before approving your loan applications. Therefore having a blemish-free credit report is important, especially when you’re just starting out on your own, in order to attain a financially secure future.

Ideal Ways to Use Credit Cards for College Students

Make sure you select the credit card that suits your purpose the best and don’t fall for the credit cards which offer free t-shirts or coffee mugs along with it. Browse through the terms of credit card agreements and verify the fees and interest rates they offer. Shop around and compare different card offers, and finally chose the best deal for yourself.

One credit card is more than enough for college students, so don’t be tempted to apply for several. Several credit card applications mark a drop in your credit ratings and put you at risk of incurring credit card debt.

A credit card is the quickest way to build a balance that you can’t repay, so charge the balance you can afford to pay off. If you pay only the minimum amount, the finance charge makes your repayment schedule much longer.

Spend within your credit limit and evade cash advance, which has a higher interest rate. The over-the-limit fees are pretty expensive and difficult to get rid of. If you go for cash advance you have to pay off the additional cash advance fees along with finance charges on the amount you withdraw.

Attempt to pay off your balance in full every month and evade carrying credit card debt for the next month. This way, you will pay for what you have purchased, and can avoid the extra fees credit card companies charge when you don’t pay in full.

It is being found that most college students with credit cards got their credit card either before entering college (39%) or during their freshman year (36%). While only 5% of students got one from a vendor on campus, (38%) chose their credit card from a mail solicitation and 19% got a referral from a parent.

All these startling facts point to the lack of credit education among current youth and emphasizes the importance of generating awareness among college students regarding this issue. Students should understand that graduating with a surmounting credit card debt can put a damper on their plans for entering the real world and hinder their way to future progress and advancement.