Avoiding Student Credit Card Debt

Posted On: July 27, 2006

By Curtis Arnold, CardRatings.com Founder

Summer 2006 is winding down and the new school year is rapidly approaching! The endless days of basking in the summer sun are fading and, at the same time, credit card issuers are starting to ramp up their marketing efforts for the new school year. To help college students deal with the barrage of card offers, we are pleased to offer the following tips. While this list is not exhaustive, it is hoped that following these tips will help students manage their credit wisely.

Be cognizant of the fact that credit card issuers are very anxious to get your business. So anxious, in fact, that issuers spend millions and millions of dollars each year aggressively marketing their cards on college campuses across the country. This marketing takes many forms…giving away T-shirts, full page ads in college papers, pre-approved credit card applications, etc., etc. Credit card issuers are seeking to develop long term relationships with college students and, according to critics, are willing to do almost anything to accomplish this goal.

Credit cards geared toward students often come with high interest rates and other unfavorable terms. This is largely because students usually have limited credit histories and also due to the fact that students have a higher default rate than other age groups. In spite of these facts, however, students should not settle for the “first offer that comes their way”. Remember, there is keen competition among student card issuers and use this to your advantage. Compare offers by reading terms and conditions carefully and choose the best offer!

Don’t use your credit card as a source of income. While many college students have full intentions of “paying off” their cards in a timely manner after they enter the workforce, such good intentions are often never realized. I know firsthand the potentially devastating effect of relying on credit cards as a source of income while attending college. I amassed in excess of $40,000 in credit card debt during my undergraduate and graduate studies! As you might expect, this debt created an extreme amount of anxiety and stress for me after school (and, incidentally, was the primary reason I founded this site). If you do find yourself “buried in credit card debt”, consider utilizing the debt resources found on our site.

Utilize the resources on the Internet to help educate yourself about credit cards and credit in general. Credit is a complex subject and, in order to master the subject, you have to be willing to educate yourself. There are many superb web sites that are geared toward educating students about credit. Consider taking a personal finance class as well!

Finally, remember that credit cards are not evil! In fact, credit cards are an excellent way for students to establish credit. Establishing credit is exciting and is a sign of true independence. Just remember that credit cards require financial discipline and prudence. We hope these tips help will help you become a credit savvy consumer during the ‘06-’07 school year!

You can find a comprehensive list of student credit cards, including reviews, by visiting the Card Reports section of our website.

We welcome your comments about credit card and other money issues in our popular credit forum!

Curtis Arnold, a nationally recognized consumer educator and advocate, has been educating consumers about credit cards since 1998. He is regularly interviewed and quoted by respected members of the national press regarding consumer credit issues. Curtis is currently working on publishing a book about credit card usage- more details forthcoming!

---

CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

---

Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!