As a student, if you had one wish, it might be to acquire a superb college education without having to spend the following twenty years paying large student loans and college-related credit card debt.
“Genie, grant my wish!” said the little girl. Poof. How much student credit card debt does a college student have?
If only, Aladdin want tobes, it were so simple! You don’t have to go broke in college to have an excellent education. It necessitates some financial know-how as well as the increasingly foreign concept of self-control.
Todd Romer, managing director of Young Money Magazine, notes that students now face more money concerns than any previous generation.
By the time you’re twenty-two, you may find yourself in college student credit card debt hell because of the escalating costs of tuition and the proliferation of high-end dining facilities on college campuses. And all you really wanted was a college degree that didn’t put you in debt!
If you’re wanting to cut back on your college student credit card debt and ease your financial burden, give these suggestions a try:
- Be cautious when using credit cards.
Nearly a quarter of college students have debts of more than $3,000 on their credit cards, with an average of $2,700. More than one in ten people owing more than $7,500! Student loans are not included in this calculation.
Romer thinks it’s a good idea to get a credit card. More than seven out of ten college students have at least one credit card, according to a recent report by Nellie Mae, a large issuer of student loans, according to the survey. It’s important to retain a credit card in your wallet for emergencies and significant purchases that you know you can pay back within 30 days, according to Romer.
Often do you use your credit card to buy things like gift cards? College students should urge their credit card companies to limit their cards to a $500 spending limit, according to Romer. Do not let them raise your credit limit unless and until you tell them that you want to do so. It’s best to have a third-party monitor your spending until you become more responsible, says Romer.
When certain colleges and universities develop multi-million dollar relationships with credit card issuers and give them the green light to solicit students right on campus, how can you acquire a college education without accruing student loan debt? Just know that if you see a Bank One credit card table appearing in your school’s student union once a week, you don’t have to engage in the offer, adds Romer. “Treat it like every other temptation you’ll face in this life. It’s important to think before you act.
- Create a weekly spending plan based on your budget (sigh).
To make it sound more enticing to college students, we’ll use the term “weekly spending plan” instead of “budget.” “Knowing what you genuinely make” is the first step in taking control of your finances, according to Romer. “Think of it as a weekly spending plan to help you pay for college and lessen the burden of student credit card debt,” says one financial expert.
It’s not uncommon for college students to have jobs, but Romer points out that even with these jobs, many of them are spending their earnings before their expenses can be covered. “You should be fine if you monitor your weekly spending plan twice a week,” he adds.
- Be prudent when it comes to taking out school loans.
Student loans should be viewed as the best investment you can make since you’re investing in your college education, says Romer. “Don’t sweat too much about having to pay it back because you’re investing in your college education,” says Romer. Despite this, it is possible to graduate from college without having racked up student loan and credit card debt equivalent to the value of our parents’ home. A good rule of thumb is to not fall prey to the marketing hype of attending a high-profile university and accruing massive amounts of debt in the process.
65 percent of students attending four-year schools or universities pay less than $9,000 a year, according to an article on CollegeBoard.com, while 56 percent pay between $3,000 and $6,000. While private four-year institutions have a wide variety of tuition and fee rates, the College Board found that just 5% of all students attend colleges with tuition and fees totalling $33,000 or more each year.