College Students and Credit Card Debt

I didn’t get into a whole lot of credit card trouble (i.e, credit card debt) when I was in college. I applied for 1 card, and used it rarely, throughout my time in college. My problem with credit card debt came a bit later, after I graduated and started working. So I know that not all college kids who get credit cards use them unwisely and run up debt.

But the statistics on college students and credit card debt is alarming. The average college student has $2500 to $3000 in credit card debt upon graduation, according to a University of Wisconsin-Madison news article.

It can be very difficult for some students, with the lack of financial education available at both the high school and college levels, to steer clear from the allure of getting your first credit card.

Why are credit cards so enticing to college students?

It can be seen as a sign of being an adult- College is a period of transition, you start not being able to drink or vote, for example, and when you graduate 4 years later (hopefully!) you are considered old enough and responsible enough to do those things. Getting a credit card can be seen as one of the steps to becoming an adult as well.

A credit card is a status symbol to some- It’s easy to want to impress your fellow classmates or friends by plunking down a credit card to pay for dinner, drinks, or something else. Adults still “pick up the tab” to try to impress co-workers or clients, so it is not difficult to see why students want to do it too.

Peer pressure can influence your desire for a credit card- Peer pressure can be a very powerful force when you are in your late teens or early twenties, surrounded by thousands of people your own age. Even seeing a line at a table with Visa or Mastercard reps. trying to sign students up can make someone want to “join the crowd”.

A credit card can represent freedom- Until the bill comes in, a student no longer has to make that phone call to Mom or Dad and say “Please Send Money!”. When the bill comes in, however, it can be a different story.

How Can College Students Avoid Credit Card Debt?

Don’t sign up for more than one card-One card is plenty when you are going to school, especially if you are not really working. Resist the temptation and free T-shirts you might get for signing up for multiple cards.

Better yet, don’t sign up for one at all- If you can, avoid signing up for one at all. You have plenty of time once you graduate and start earning an income to build up your credit history.

Use it wisely, for necessary expenses or emergencies- Using it for expenses such as books, or true emergencies, like car repair. Don’t use it when you are going out on a Thursday night.

Use it for convenience, when you already have the cash-If you are using it to build up your credit history, be smart and pay for things when you already have they money-and then pay off the bill quickly.

Resist the temptation to use it in front of friends- Don’t try to impress others by paying for dinner or a night out. If you or they don’t have enough money, find a cheaper alternative.

Leave it at home- It’s a simple strategy, but it works. If you leave it at home most of the time, you can’t use it, obviously.

Pay the bill in full every month- Once you start making the minimum payments instead of paying off the balance, you are setting yourself up for a long, expensive lesson. Trust me, I know.