Quick Facts on Credit Card Debt of College Students

Factors
College Credit card debt tends to increase with the grade degree of college students. In 2008, college seniors with a minumum of one card racked up $4, 138 in debt, whilst freshman had about $2, 038. By the period they graduate, about 20 percent of college students convey more than $7, 000 in college credit card debt, based on the Sallie Mae.

Effects
Carrying credit card debt in college can teach students how you can manage their finances, but it may damage their credit score in the short-term. According to Truth About Credit score, 25 percent missed at least one payment and 15 percent went over their borrowing limit in 2008. Black marks on your credit report not just lower your credit score, but some employers consider your credit history when you obtain a job.

Prevention/Solution
In February 2010, Congress enacted new credit card legislation that means it is harder for credit card companies to sign up college students for credit cards. The new law prevents companies from giving credit cards to minors. People younger than 21 can obtain a credit card, but only if they have a cosigner or perhaps a steady income, according to College Board.

Function
College students are not just spending money on small items like pizza with credit cards, but additionally education expenses, according to Sallie Mae. College kids put typically $2, 200 in education related expenses, such because books and tuition, on their credit card within 2008. For some, credit cards are their only option for paying tuition because of the credit crisis of 2008.

Tip
College Board recommends that college students consider a debit card over credit card so they do not accrue debt, while having the ease of a plastic card. If a college student does have credit cards, he should only use it as a last resort and prepare to repay the balance immediately. Also, reading over the conditions and terms are essential so you do not pay an annual fee or perhaps a very high interest rate.