Debt credit card for students: A survival guide for students

College is the last stage of care free before real life begins, or at least it should be. Students should be able to go to sleep every night with the only pressing responsibility being the morning the English exam tomorrow. They still have to learn to live in a world where, although they can not afford much more than the late night drive through occasional Taco Bell or downloading the latest hit single, at least they are not worrying yet to pay a mortgage, most forms of insurance, utility bills or college loan that is allowing them to receive education.

Unfortunately, for many students, this is not the case. Many are already burdened with financial pressure because they have accumulated credit card debt, in some cases, more than $ 7,000 worth of it. Increasingly, students are yet to come on campus with credit card debts under control. Consolidated Credit Counseling Services Inc. reports that 20% of freshman got their credit card in high school and nearly 40% sign up for one of their first year in college. With plenty of on-campus, mail and maps on the Internet offers to give a low introductory rates, freebies, and bonus airline miles, it is not surprising that according to a 2001 study Nellie Mae 83% of all undergraduates have at least one credit card and carry an average balance of $ 2,327.

The debt problem credit card rate has many implications for a student. Some end up dropping out of college all together so they can work full time just to pay bills credit card. If they are able to stay in school, but in the process ruined their credit rating, it can affect their ability to rent an apartment, pay for insurance and even do the work that will help them pay their debts. Even relationships suffer because of financial difficulties. There is also a psychological effect on students. Stress can lead students in depression, and in some cases has been a contributing factor to suicide.

Of course, it was not always like that. According to Dr. Robert D. Manning, professor at Rochester Institute of Technology and author of Credit Card Nation, in the late 1980s the limitations of students by credit card were approximately $ 300 - $ 500 parents were required to co-sign. But when the credit card companies started making a lot of money during the economic recession of 1991, they began looking for new markets and found him in the student population. Issuers eliminated the requirement for co-signature and started raising limits, which, when combined with parents increases the financial pressures and higher costs of education, gave students a way to financed by the university.

And students are an easy market to exploit. In his article "Credit Cards on Campus," Manning wrote, "the credit card companies encourage fantasies of easy money because students are so profitable: teens have financial naivety, the expectations of the material high, and receptivity to marketing campaigns relatively low cost, high earning potential and future demand for financial services. "

Credit companies advertising to the vulnerability of young students is not the only factor in the current trend. Most students simply do not receive education in personal finance management and credit card they need to meet the onslaught of offers. According to Consolidated Credit Counseling Services, Inc., only 15% of high school students take a course in personal finance. And, according to Jump $ tart Coalition for Personal Financial Literacy, a nonprofit organization that promotes financial education in K-12, parents for various reasons are not to talk to their children about the privilege and the responsibility that goes along with using a credit card.

Dr. Carol Carolan, Executive Director and founder of the Center for Education Student Credit Card, says the single best thing parents can do to help their children avoid the pitfalls of credit card debt is educate them. Parents should talk to their children about it early and regularly. Dr. Carolan offers the following tips for parents.
When a child has reached an appropriate level of maturity and understanding of personal finance, co-signing a credit card can be very beneficial.

Get a credit card with a low limit and no annual fee (see "Compendium of cards" of our website to compare prices for credit cards for students).
Talk with your child the details of the credit card, including interest rates on purchases and cash advances.

Review all charges each month.
Show your child what finance charges might apply if the balance is not paid in full and on time. This includes any interest, fees and penalties.
Be a good role model.

Experts do not all agree on the appropriate age for a first credit card. Dr. Manning, for example, states in its Article credit cards on campus that have at an early age may actually result in fewer debt problems later. "Other experts say to wait until junior or senior year in college is the best. The parents need to understand is essential that students once they reach the college campus, they will be overwhelmed by credit card offers and will be able to obtain a card, regardless of whether they are supported financially by their own parents.

And talking with students involves more than simple calculations of costs, interest rates, and balances. Students need to understand the messages they receive through advertising, the difference between a need and a necessity, and the lure of money. Give students a healthy environment, a realistic perspective of money and material possessions, and they will be better equipped to make wise decisions.

Universities and colleges play a huge role in the trend of student debt credit card rate. Some issuers of credit cards welcome on campus because they receive revenue as well. But others are beginning to recognize the problem and restrict the activities of credit card companies on campus. Manning states in his book Credit Card Nation, that "During the 1999-2000 academic year, more than 400 colleges and universities made official policies against on-campus credit card marketing and nearly 600 other schools considering similar restrictions. "

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