Student Credit Card Crisis
Today’s college students if not careful can face a student credit crisis. A 2004 study has shown that 76% of all undergraduate college students have at least one student credit card and may carry an average balance of $2,169. Moreover, this was four years ago. College Students must learn how to manage their debt. However, most young adults are not wealthy enough to avoid such liabilities. They simply have to borrow to make it work. Usually, student loans are part of some kind of a financial aid package. College student loans are offered at or below market interest rate and have terms so generous and forgiving they really require little to no discipline. If the paperwork is kept current, paying them off can be temporarily deferred until after graduation.
College student loan terms are generally easier on the borrower as well; but they really do not teach the college student how to manage debt. If a college student owes $15,000 in college student loans, they probably will not feel overwhelmed. However, if $5,000 is owed on a past due student credit card balance, they may likely be headed for serious financial trouble. Student loan lenders are more likely to renegotiate a student loan term; a student credit card company will probably not be so willing to do the same.
College student’s credit card debt can easily be an epidemic. Credit cards are easily obtained with low introductory interest rates and much too high credit limits. Free gifts are often times used to encourage college student to apply for the card. Some students will become part of the problem by convincing their friends to sign up so they can obtain a commission.
Stolen student credit cards are also a major issue not only on campus but also in the real world. Unfortunately, credit card fraud of any kind is a very common experience for a student.
Credit card companies offering student credit cards will often set up promotional booths on campus, offering T-shirts and other items for opening a new account. Although a student credit card benefit can seem really great, students must review repayment terms carefully. Some companies do not warn the students about the potential debt problems.
Promotions for student credit cards are found on classroom bulletin boards, in restaurants, bars and mailboxes. However, college students do not have to fear credit cards. Sooner or later, we all have to learn how to use them and college may very well be a good time to start.
What Are Some Credit Management Solutions
Paying your student credit card balance in full every month will help you build a good credit standing and also avoid interest rate charges. Below are some more suggestions to help college students learn how to manage their credit card debt:
1) Compare the credit card fees. You may pay a variety of charges to use one credit card, including annual fees, late fees, over limit fees and transaction fees. Learn about the hidden fees to find the best lender.
2) Understanding your credit card statements. Check every statement for correct information, including purchases, credits and payments. Act quickly to correct any errors found.
3) Make payments on time, always. Consequences of missing the due date will include higher interest rates on future purchases for all credit cards, and late fees until your account is brought current.
Student credit cards.com @ October 22, 2008
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