College credit card debt is a pretty big problem today, and statistics prove it. Credit While there are good reasons to get her card as a student (e.g., to build a good credit history), it may be tempting to treat the card like “free money”, but no. not.
Learn more about college student credit card debt and learn key tips for dealing with it effectively.
Even if credit companies try to entice users with perks such as higher credit limits, lower interest rates, and credit card perks, it may not materialize in the end. The reality may look more like late payments, annual fees, and a bad credit score than having plenty of cash.
average college student credit card debt
Statistics on college students and credit card usage aren’t great.
Things have improved somewhat as credit card companies can no longer provide We are distributing products to students free of charge to encourage them to apply for the card, but there are also workarounds such as distributing coupons.. Unfortunately, credit cards are still very accessible to college students.
Number of college students with credit card debt
According to a US News survey, 46% of the college students who participated in the survey were in debt with credit cards.And credit cards are common at very high interest rates.
How many credit cards do college students usually have
The same US News survey found that most college students have less than $1,000 in debt. However, there is more than that.
In fact, 27% admitted they owe more than $2000.
This can leave college students in financial straits before they finish school.
college credit card debt tips
Whether you’ve made a purchase, paid for an expensive car repair, or needed a new textbook, you may still have credit card debt. You need to learn how to manage your credit card debt, develop a repayment plan, and avoid falling into the same trap in the future.
Here are some tips for getting out of debt and improving your finances.
1. Forgive Your Mistakes
Everyone has made mistakes. Perhaps you too have high credit bills. Or maybe you couldn’t plan and had to rely on your credit for important life situations.
that’s ok. you have come to understand it. Now it’s time to make some changes and find out how to manage your credit card debt.
2. Make a plan to pay off your credit card debt as soon as possible
No matter how small your income is, you need to plan how you spend your money each month. Your plan should include how much you will pay for your debt.
Different strategies work, depending on the situation.
For example, the debt snowball worksheet method is a great approach to paying off multiple credit card balances. However, if he only has one card like I do, focus on paying off as much as you can each month until you catch up.
For college students with limited income, this may seem overwhelming or impossible. But it’s not. You can achieve your goal of living debt-free.
3. Start saving little by little
Many people use credit cards to cover unexpected expenses such as repair bills and medical bills.
Instead of relying on credit for these expenses, start saving an emergency fund. Doing so will prevent debt from accumulating with every major event in your life.
The ultimate goal is to never carry over your balance. You’ll also want to have an emergency fund that covers 3-6 months of living expenses in full.
But for now, focus on reaching $1000 or so in savings. Alternatively, $500 is fine for him if it covers a lot of expenses. Break it down into smaller goals if necessary.
You can save this money by taking a part-time job or trying out unearned income ideas for students.
4. Earn more money to pay off debt
If you can increase your income, you will be able to pay more than the minimum monthly card payment. Consider different ways to earn extra cash, like walking the dog or doing extra hours at your regular job.
If possible, use any extra money you earn to pay off debt. After paying for it, of course.
5. Living below your income
An important step in managing credit card debt is living below your income. If you live below your income, you won’t be able to rack up average college credit card debt.
The average college student’s credit card debt is approximately $1,000 or less.but Average credit card debt of American households Over $17,000! Bad habits are hard to break, so knowing your money situation now can prevent financial misfortune in the future.
6. Avoid overspending
Another important step is learning how to stop wasting money. It’s easy to reach for your credit card to make an impulse purchase and end up paying far more than you thought you’d pay for the new item you bought.
For example, say you spend $20 a week on coffee. That equates to him $1,040 a year. You can pay your credit card with that money.
You can save money and avoid debt by eating out less often, learning the basics of shopping for groceries on a budget, and buying second-hand rather than new.
7. Don’t go into more debt
In addition to paying off your debt with minimum payments, try not to add to your debt if possible. To reduce credit card debt, stop using credit cards, even if you have money available.
Remember, if you use your card today, you will have to pay back the money later. Every time you don’t use them, you get out of debt faster.
8. Build a good credit score
Perhaps you are so in control of your spending that you have a credit card. In that case, pay the full amount on time each time if you want to start building credit.
Paying off your credit bills in full and keeping your cards in good standing will help you save money for the future.
But make sure you use it for regular expenses that you pay each month, not for unnecessary expenses. And only do this if you know you won’t be in debt.
expert tips
Even if your credit card debt is huge and you feel like you have a lot of work to do, just get started. Time goes by faster than you think, and if you can pay off a few debts, you’ll soon start feeling better. Through this process, you will also develop good financial habits.
My college student credit card story
Like many people, I have made quite a few bad decisions financially. One of them was taking out credit card debt when I was a young college student. In fact, I was above the average college student credit card debt.
When I was in college, it seemed like every big event or job fair had a credit company (economy-busting) agent. A balloon-decorated booth is set up, and you get a free t-shirt and pen with your credit card.
I remember being lured into one of those booths, where they said women could win up to $2,500. All I had to do was fill out this one form of hers. You don’t have to pay the money back immediately.
Plus, I ended up getting a nice t-shirt with the credit card company’s branding on it. (But where are you going to wear it?)
I was 18 or 19 at the time and I was away from home working on campus for $116 every two weeks. That was the only job I was allowed to do as an international student.
Luckily, my mother supported me by paying school fees and rent. Still, my responsibilities were to pay phone bills, buy my own groceries on the cheapest grocery list, and tend to other personal needs.
So I paid my monthly phone bill (about $30) and bought enough Coca-Cola and ramen every two weeks to keep me alive (about $40). (I don’t know how I survived on this awful diet.)
How I got my first credit card
I found myself calling home to tell my mom about the “basically free” money the school was offering. what is her reaction? “What do you need to buy with credit in your life?” She has a point.
Well, the next fair had another booth and another agent. Again I was tempted by freebies and free money.
I explained to them that my mother didn’t think it was a good idea. They said, ‘But your mother never needs to know.Statements are sent directly to your on-campus address. ”
So I signed up immediately and was approved for a $2,000 line of credit.
Deplete all credit card balances
I will never reveal what I spent that $2,000 on. However, I can say that I maxed out the card very quickly.
A few weeks later, when I received the first statement, I was perplexed. What is the interest rate of 24.99%?
I spent sleepless nights thinking about my new debt and the fact that I had no idea how to get out of my credit card debt. He didn’t seem to know how to stop worrying about money.
In the end, I had to tell my mother what I had done (before she found out). Of course, I received a fair amount of scolding.
Then I used what little savings (about $75, I think) and the money I earned from my school job to pay off the debt and the horrible interest it had accumulated.
impact of debt
$2,000 now seems like a meager amount, but thinking about it every day stressed me out a lot, and it took me months to pay it off, but I learned a valuable lesson about how to manage my credit card debt. I’m sure.
I ended up paying back $2,000 plus 24.99% compounded interest, which was far more than what I paid for with my credit card.
Moral of the story: College credit card debt sucks if you can’t afford to pay it off in full each month.
Credit card alternatives in college
There are many other ways to pay for your expenses and necessities while in college. Instead of using a credit card, try these ideas.
part-time job
If you don’t want to get stuck in debt, try a part-time job or a unique side job while you’re in school. With a job, you can cover your living expenses and necessities without worrying about credit card bills.
Plus, getting a job now is a great post-graduation exercise that will likely land you a full-time job.
debit card
It is better not to open a credit card account than to worry about credit card payments and late fees. Sure, you may have to wait to shop or find other ways to pay for your necessities, like working more hours, but the bright side is that you’ll be debt free.
better spending habits
Instead of falling victim to credit cards, just be aware of your spending habits and avoid impulse purchases. Create a monthly budget, even if you don’t have much money to spend.
Understand your bills and payment methods, and don’t spend money you don’t have.
What if I have a large amount of debt?
The best way to deal with a large amount of debt is to get all the facts first. How much do you owe, when each payment is due, etc.
From there, take your time and consider how you can repay, whether by working extra hours or reducing your budget.
How do I handle student loan and credit card debt?
If you have both a loan and credit card debt, it’s a good time to focus on when you need to pay it off. If you’re still in college and your student loans aren’t due yet, focus on your credit card debt while you’re in school. That way, you can get further advice on student loans to work on after graduation.
Can you finish college without credit card debt?
It may seem impossible, but it is possible to graduate from college without the average college student’s credit card debt. Refuse to open a credit card, shop with cash, pay for your living expenses by working side jobs or working long hours instead of borrowing money.
Other Articles Related to College Debt
Avoiding credit card debt in college can save you money and stress
When it comes to personal finances, ignorance is not happiness. It will eventually come back to bite you. Learn about all your current debt, know your interest rates, and learn how to manage your credit card debt.
Keep your peace of mind because you have a plan to pay off your college student credit card debt, as long as you stay consistent.
Once you’re debt free, you can plan a financially sound life and develop good money habits.