Student Beware

It’s that time again when college campuses are abuzz with excitement. For many of these students, it can be the start of their life in the adult world. It does not always turn out to be a positive thing though because the college student is barraged with, among other things, credit card offers.

A recent study conducted by the Attorney General’s office suggests that credit card usage among students can cause graduates to carry the burden of credit card debt along with their student loan debt. The average college student graduates with $18,000 in credit card debt, some charges being for tuition and school related expenses, most being for party essentials.

This accounts for over $500 in monthly credit card debt, paying minimums for around 18 years. Not to mention repayment of student loans and living expenses such as housing, automobile and insurance. You could easily be looking at a $2,000 immediate monthly expense. If it becomes a problem, never fret, you can always get another credit card and put yourself deeper in financial slavery to the credit card companies.

Student credit cards can spell early financial disaster for some students succumbing to temptation and taking advantage of those readily available lines of credit conveniently offered from Visa and MasterCard. The amounts can accumulate quickly. Growing up comes with the added responsibility of paying interest, late fees and penalties.

If you need to carry a credit card, develop the discipline of paying off your card balance every month. It is swiftly becoming a major concern as more students are carrying and using charge cards while seeking higher education, yet a small percentage contemplate the power that these little plastic card hold.

Just a short time ago, the major debt that a student would anticipate was student loans. Now the average student will triple the amount of credit cards they carry from freshman to senior year and graduate with an average $8,000 additional credit card debt.

The credit card companies paint themselves a cheery picture, portraying themselves as responsible lenders, yet on the Visa website you can read:

“It's not uncommon for people to have difficulty handling credit, especially when they are just starting out... keep in mind that a bad credit rating can have serious negative consequences down the road."

Despite the fact that the credit card companies aggressive targeting of vulnerable by contracting slick marketing companies.

I realize that a credit card is necessary to help pay some expenses that the student will ultimately face but these should not include parties or spring break vacations. A debit card connected to a savings account may be a good alternative to help with expenses. The students parents could agree to help with this.

The emphasis is normally placed on schools to prepare students for life in the real world but I have yet to see schools offer any type of real education about credit, credit cards, debt and debt management. But they are not fully to blame. Some responsibility rest squarely on the shoulders of the parents. Finances should be stressed starting at an early age. Parents need to talk with their children about these important financial issues and maybe even learn together because they might not have received the necessary education either.

I believe that schools should have classes in finances starting in kindergarten, stressing the importance of savings and making financial education courses required classes prior to graduation.

If this was the case, do you think that unsecured consumer debt would be as rampant as it is today?