Managing Credit Card Debt
When you turn 18 years old, you begin receiving mail from credit card companies. It's enticing and you begin thinking of all the things you can buy with the credit card. In all reality, the credit card is used to help students in college pay for things and can really begin a deep trap for a lot of debt acquired. As much as a credit card is necessary to begin building credit, it's imperative that you know the dangers, have a strict usage policy with yourself, and don't get behind on payments each month.
Debt can be crippling especially for recent high school graduates that have never been expected or taught how to handle credit card or loan debt. When many of these graduates enter college, they sign paperwork not necessarily thinking about the hole of debt they are digging for themselves.
Much of college student debt and financial struggles could be related to the lack of financial courses in high schools. Only 17 states require a personal finance or similar courses for graduation. Most students will graduate from high school and go on to college with little to no experience in personal finance and any basic understanding of credit cards, loans, and interest. Schools favor more traditional, scholarly, classes resulting in many classes teaching life skills, like personal finance, getting cut from the curriculum. If students were taught some basic finance and budgeting principles in high school, it could help lessen the large amount of student credit card debt (Bresiger, G. & Bresiger, G., 2014).
While many college students use credit cards to help them build credit, or only use for emergencies, many graduate with an overwhelming amount of credit card debt. This is often the case when they use credit cards for everyday purchases without a second thought (which happens with 46%of students) or miss payments. While having a credit card can be beneficial for your credit, and often help to budget, it is important not to be negligent spending it because id the balance gets too high and and has interest added, the debt you can incur will be very difficult to escape (Students Credit Card Use on Campus: The Debt Trap).
Don’t let the thought of being in credit card debt scare you from opening a card account while in college! Credit cards are scary and can be dangerous, but it is also necessary that college students are aware that building credit is important for post-graduation purposes. A great rule of thumb for credit card use among college students with fluctuating income is simply use the card on gas and groceries only. This should allow enough transactions to build your credit score, but not enough to give yourself any damage and be obtainable to meet the monthly payments.
Debt can be crippling especially for recent high school graduates that have never been expected or taught how to handle credit card or loan debt. When many of these graduates enter college, they sign paperwork not necessarily thinking about the hole of debt they are digging for themselves.
Much of college student debt and financial struggles could be related to the lack of financial courses in high schools. Only 17 states require a personal finance or similar courses for graduation. Most students will graduate from high school and go on to college with little to no experience in personal finance and any basic understanding of credit cards, loans, and interest. Schools favor more traditional, scholarly, classes resulting in many classes teaching life skills, like personal finance, getting cut from the curriculum. If students were taught some basic finance and budgeting principles in high school, it could help lessen the large amount of student credit card debt (Bresiger, G. & Bresiger, G., 2014).
While many college students use credit cards to help them build credit, or only use for emergencies, many graduate with an overwhelming amount of credit card debt. This is often the case when they use credit cards for everyday purchases without a second thought (which happens with 46%of students) or miss payments. While having a credit card can be beneficial for your credit, and often help to budget, it is important not to be negligent spending it because id the balance gets too high and and has interest added, the debt you can incur will be very difficult to escape (Students Credit Card Use on Campus: The Debt Trap).
Don’t let the thought of being in credit card debt scare you from opening a card account while in college! Credit cards are scary and can be dangerous, but it is also necessary that college students are aware that building credit is important for post-graduation purposes. A great rule of thumb for credit card use among college students with fluctuating income is simply use the card on gas and groceries only. This should allow enough transactions to build your credit score, but not enough to give yourself any damage and be obtainable to meet the monthly payments.
Comments
Post a Comment