College Students and Credit

College students are notorious for being broke. Unfortunately, most of them try to fix it by using a credit card. What's wrong with that? Isn't that what credit cards are for, having money to spend you when you don't have it? Not exactly. Credit cards are for convenience. You dont to carry cash, it's faster then cash, and you don't have to wait for payday.

What's the problem? College students don't have a lot of money most often and instead of using the credit card because it's easier or as a loan until they get paid, they use it to buy things they can't afford. If they want to go out to a club but they have no cash, they use their credit card. If they want to buy some music or dvds, they use their credit card. If they need books, they use a credit card. It's understandable that you need books, so it might sound okay to use a card for that, and I'm not saying you shouldn't buy books for your class. You'd probably be better off using a student loan because you won't have to pay the interest on it until you graduate and the interest probably isn't as high.

College students buy what they can't afford, so that when their bill comes, they can't pay it. Unsurprisingly, their job waiting tables or folding clothes at a department store is much too small to cover the bill. When you don't pay your bill, they begin to charge interest. Credit card interest rates are much higher than most other loans, especially if you have little to no credit, which is the case for many college students.

If you are charging hundreds of dollars every month that you can't pay, you are not only going to owe that money, but all the interest getting tacked onto it at up to 20% or more. Doing this for four years in college could cause you to have thousands of dollars in debt plus a poor credit history. If you stop making payments, your credit will get even worse which may prevent you from ever being able to get a mortgage or other loan.

Ultimately, everyone needs to be careful with credit cards. Unfortunately, college students have less funds come in and often are more tempted to spend so that they can have fun while in college. If you are worried about getting into debt, just remember one simple thing when having a credit card. Always pay off your balance in full every month! This can save you thousands!

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