Of College, Credit Cards and Debt
It’s a sad but true fact that debt and college
students all too often go hand in hand. A study by the Institute for College
Access & Success showed that in the year 2012 alone, “71% of all students
graduating from four year colleges had student loan debt” “Quick Facts about Student
Debt”,The Institute for College Access & Success). It’s one of
many unfortunate truths of our world that graduating from college does not come
for free and successfully earning a degree can also earn you a large bill to
pay. However, tuition isn’t the only thing draining the pockets of young
students. College-goers all over the U.S.A find themselves being driven into
debt not only by their tuition fees, but by their own credit cards. Studies have
shown in modern times that“30% of college students have “maxed out” their
credit cards” “Today’s Top Credit
Card Debt Statistics”,Debt.com). The same studies showed that “by
2009—the average soared to over $41,000” (“Today’s Top Credit
Card Debt Statistics”, Debt.com) dollars in credit card debt for college
students. With the number of college students driving themselves into debt
increasing year by year, it can make you wonder;” Why is it that college
students find themselves into financial ruin brought about by credit cards so
easily?” It’s easy to just chalk it up as just being careless. In reality,
though, there are actually many reasons students find themselves buried in
unpaid funds.
Why are the Causes of Credit Card Debt?
It is partially true that credit card debt can be
brought about by irresponsibility. Most of us remember what it was like when we
first started college. Many of us considered ourselves to finally be “grown-up”
and fully believed that we were ready to handle the real world and the
responsibilities that came with, including the responsibilities that come with
owning a credit card. Most of us didn’t think twice about using credit cards
whenever we liked to, seeing any debts that might’ve resulted from it as “no
big deal” or thinking that debt could be paid back with ease. While this is a
common reason, it’s far from the only one. Many students find themselves in
trouble with their credit cards because they’ve been outright targeted by
credit card companies. Credit card companies will often go out of their way to
appeal to people of college age because “they have a strong hunch that your
parents will bail you out if you run up your credit card bill” “Why
Credit Card Companies Target College Students”, Latoya Irby). On top
of this, most college students are just being introduced to the concept of
credit cards and will likely have a long history of credit card usage in their
future. Because of this, credit card companies will often try to appeal to the
particular demographic of college students.
They’ll market and advertise the
appeal of credit cards, painting them as these amazing, spectacular cards that
you use to buy whatever you’d like easily which makes it easier to convince
college goers to purchase credit cards without much of a second thought which
means more money for them. They will “conveniently” leave out the negative
details and potential misuses of credit cards to “sweeten the deal.” This can
give the young and impressionable college-bound to have a flippant attitude
towards money and spending it through credit card usage. It’s easy to get
someone to agree to a deal if they don’t know about the downsides of it. By
dressing up credit cards as these magical inventions, they make college
students more likely to sign up for one without even knowing about the potential
consequences. It’s important to remember that yes, credit cards can be
incredibly useful but if misused, it’s easy to drive yourself into a massive
amount of debt that can have disastrous results for potential college-goers.
What are the Consequences of Credit Card Debt?
As said before, college is not cheap. Without the use
of financial aid or scholarships, students will often find themselves looking
at a large amount of debt. Even with the help of financial aid, piling the potential thousands of dollars that
can be piled up in a credit card debt can turn what might have been a somewhat
manageable debt into one that’s impossible to pay back. In extreme cases, it
can cause the loss of any financial aid a student might have received. Student
have outright dropped out of college because their student loans, combined with
credit card debt, made it impossible for them to continue attending. In worst
case scenarios, students have outright had to declare bankruptcy due to the
credit card debts alone. On top of ruining a college career, credit card debt can
ruin an actual career as well. Potential employers will often look at the
credit background and score of applicants and the Society for Human Resource
Management has determined that “accounts in debt collection can have a 49
percent impact on your chances of being hired” “Debt: The Dangers of
Credit Cards for College Students”, Bryan Vo). It’s difficult enough
to find a job in today’s world. A massive debt can outright destroy a potential
applicant’s prospects and in some cases, even their families can be affected by
it. A student having to declare bankruptcy is bad enough but an entire family
losing potential savings that could be used towards the betterment of their
children, a successful retirement or just their day to day lives not only
destroys the student’s life but the lives of their loved ones as well. Credit
debt is not “no big deal.” If not managed, it can destroy lives.
Is it possible to escape Credit Card Debt?
As horrible as credit card debt may be, it’s not
impossible to get out of. If you are a college student stuck in credit card
debt or fear you may find yourself stuck in credit card debt, it’s important to
remember that being in debt is not necessarily the end of the world. It doesn’t
make you a bad person and it doesn’t outright mean that you’re doomed. There
are ways to not only get yourself out of credit card debt but manage your
credit so that you never have to worry about falling into debt to begin with.
- · There are two well known strategies for getting out of debt. The first is known as the “Debt Avalanche: starting with the highest interest rate and working your way down, which saves both time and money” “The Fastest Way to Pay Off $10,000 in Credit Card Debt”, Brian Karimzad). The second is known as the “Debt Snowball: paying off small debts first to get the warm and fuzzies that will motivate you to keep going” “The Fastest Way to Pay Off $10,000 in Credit Card Debt”, Brian Karimzad).
- · Regardless of the choice you make, the important thing to remember is to take time paying off your debts. Don’t lose yourself and just throw whatever money you make at the pile of debt because you might find yourself in an even bigger debt. If you’re having difficulty paying back your debt, talk to your creditors about lowering your interest rates. Doing so will save you money that you can save up in order to pay off the debt quicker.
- · If you want to avoid garnering more debt, consider a debit card over a credit card. Statistics have shown that “more than twice as many college students in 2013 used debit cards (77 percent) as used credit cards” “Credit card debt statistics”, Yasmin Ghahremani). Debit cards will not only give you easier access to money but lets you avoid being sucked into the quicksand of debt.
- · As for avoiding credit card debts to begin with, the best advice to be given is to learn the difference between needs and wants. Use your credit card sparingly on necessities such as food, water, shelter and clothing.
Always
pay attention to your credit score. Don’t miss payments. Don’t overspend. Don’t
be fooled by credit card companies who glamorize credit cards while brushing
the negatives under the rug. Keep your
head about you when it comes to finances and you’ll never even have to worry
about debt. College students and debt might go hand and hand but
that doesn’t mean they always have to be.
Works
Cited
CreditCards.com.
“Credit Card Debt Statistics.” NASDAQ.com, Nasdaq, 23 Sept. 2014, www.nasdaq.com/article/credit-card-debt-statistics-cm393820.
Irby,
LaToya. “Here Is a Look at Why Credit Card Companies Target College Students.” The
Balance, The Balance, www.thebalance.com/credit-card-companies-love-college-students-960090.
“The Fastest Way to Pay Off $10,000 in Credit Card
Debt.” MagnifyMoney, 18 June 2018, www.magnifymoney.com/blog/balance-transfer/the-fastest-way-to-pay-off-10000-in-credit-card-debt/.
“Figure 2f from: Irimia R, Gottschling M (2016)
Taxonomic Revision of Rochefortia Sw. (Ehretiaceae, Boraginales). Biodiversity
Data Journal 4: e7720. Https://Doi.org/10.3897/BDJ.4.e7720.”
doi:10.3897/bdj.4.e7720.figure2f.
The
Institute for College Access & Success. 2014.
Quick
Facts about Student Debt
.“Today's
Top Credit Card Debt Statistics.” Debt.com, Debt.com, LLC, 13 Feb. 2018,
www.debt.com/edu/credit-card-debt-statistics/.
Vo,
Bryan. “Debt: The Dangers of Credit Cards for College Students.” Golden Gate
Xpress, 19 Oct. 2011, goldengatexpress.org/2011/10/18/credit-opinion/.
