Student Credit Card Debt: The Facts

by : Ted Batron

Fact number one. There aren't many college students living on their parents money. Many people believe that students are getting a free ride. That they have parents who planned. For some, that is true. But for many the monster of student credit card debt looks them in the face every day. This debt is rising annually because for many it is their only option for college. Instead of studying after class many students have to go to work to take care of the bills that the student loans won't cover. Most college students definately don't get a free ride!

Student credit card debt is'nt always accumulated from irresponsible partying and recreation. Most of it comes from a need for survival at school. All of the expenses that a student has from food to housing and books and supplies can end up being a mountain of credit card debt. The beginning of the debt spiral is almost a necessity for some students just to make it through school with the materials that they need. Without student credit card debt, they wouldn't be able to complete their education.

Staying Focused On Your Education

Parties are great. But students need to make sure they can supply themselves with the necessities for school. Its necessesary to prioritize and get things in order. It's never easy to pay off your student credit card debt, and sometimes things can spiral to the point that you're so overwhelmed that you don't want to even deal with it. But remember, parties are not a necessity. They may sometimes feel like a necessity, but they can also leave you burdoned with debt before you even have a chance to get a job and enter the workforce. Try not to get in debt over the "Animal House" culture. Keep your priorities in order.

The interest rate on student credit card debt is probably going to be high. Due to the age and lack of credit history of most college students the rates are very poor. Because college students have limited income they are prone to missing or being late on the occasional payment. Because of this they do represent a higher risk and credit card companies will raise the rates to exorbitant levels for late paments. You need to make sure that you keep up with the payments, and don't incur the debt if your not absolutely sure you can keep up with your payments.

Lastly, its important to understand that it can take years to pay of your student credit card debt! Make sure that you put yourself on a debt repayment plan immediately when you get a secure job. Try not to let your credit card balance go over 50% of whats available. In other words if you have a card with a $5000 limit, think of it as a $2500 dollar card. Interest rates are sometimes calculated as a ratio of your balance to your limit and at 50% you become a higher risk, so many times you will get your rate jacked up.

While credit cards may be a sad fact of student life, the debt continues long after schools out. Watch your finances and don't start your life with excessive student credit card debt.