Jes B asked:




College student credit card is nothing more than a marketing term aimed at the college going populace and their financiers: usually parents or legal guardians footing the bill. It basically works like any credit card: it needs an initial deposit, its credit limit has a severely low ceiling, and it carries very high interest rates plus hidden fees. Unfortunately, when a college aged person acquires such a credit card, (or when their guardians acquire it for them,) debts become inevitable. In a 2006 study, it is said that at least 98% of graduating college students had college student credit cards, and that the average debt per student is $2,700. About ? of college student card holders owe the system more than $3,000, and that 10% of them have a bill amounting to more than $7,000. Most of the time, the acquisition of these credit cards are based on the guardians’ needs to help their wards become financially independent. Regrettably, the cards eventually become financial traps to hapless college students.

College student debt is a staggering problem these days, but very much avoidable. A student has to be responsible enough to know how to use such a credit card and to use it with the thought that ALL credits should be paid in due time. Many young people seem to think that a one is a license to go crazy at a store or at the mall – and that unless the credit card was specifically denied by an establishment, they can just shop, shop, shop to their hearts’ content. Others are simply surprised by the accumulation of the credits on their bills – small incidental expenses, a few times a day, can actually result in a long list of financial dues. Other cases are complicated by the fact that these “credits” are added to a list of student loans.

Laying the groundwork for financial independence should start with re-educating the person acquiring the card about the limits and pitfalls of owning any credit card. First of all, the person in question should understand that credit means purchasing goods, products and services without immediate payment; but there will be inevitable payment soon enough. That person should also understand how penalties for late payment of dues (or non-payment of dues termed debt) and interest charges can add a hefty amount to existing credits – which should still be paid under any condition. And lastly, college student debt is 100% avoidable, if only the students responsibly keeps track of all their expenses and meticulously repays them back when the time comes.

Lawson