Comments on: How Students Use Credit Cards

By: Vicki@collegeparentcentral

Vicki@collegeparentcentral — Wed, 06 May 2009 23:46:30 +0000

This is a really important issue. So many students graduate with enormous college loans. When they add their credit card debt to it, it will take them years and years to recover. It’s not fair to blame the credit card companies, but they inundate students with offers – it’s just too tempting. Students (and many other Americans) just don’t realize how quickly the debt can add up.

Thanks for an enlightening post.

By: Paige

Paige — Sat, 25 Apr 2009 19:54:36 +0000

I got my first credit card when I was 18. The limit on it was only $300. I was not the normal teen though, I paid off my $30-$50 balance every month. I have always hated to be in debt. Almost ten years later and I am the same way.

By: Michael Harr @ Wealth...Uncomplicated

Michael Harr @ Wealth...Uncomplicated — Sat, 25 Apr 2009 17:05:40 +0000

No surprises here. With less work availble for students and parents strapped for cash as a result of the downturn in the economy, it’s natural to see an expansion in students’ debt load. While it is sad to see these numbers and the future financial horror that will visit a good number of these students sooner than later, the bottom line is that we’re doing a piss poor job of educating our young people. Some items I don’t see include:

1. Percentage that pay late and/or over the limit fees on their cards
2. Percentage that will receive collections calls
3. Amount of money colleges/universities get paid to allow companies to sell debt on campus
…
..
.

If you think about it, the first independent financial decision most people make is not to open an investment account, but rather, is to open a debt account in the form of a credit card. The ones I have the greatest concern for are those with parents who are telling them they must have a credit card.

It used to be that if you wanted to get ahead financially, you’d need to save more than your peers. Now, it would appear that to get ahead, you only need to say no to debt. Having zero net worth is better than the many who are underwater. I would go so far as to contend that credit cards and other unsecured debt serves to increase the gap between the haves and the have-nots…not the other way around as the industry continues to claim.

Jim-thanks for putting this up there…these stats should be included in every admissions application, but whatdoiknow?

By: Steven

Steven — Thu, 23 Apr 2009 18:05:22 +0000

Out of all my friends, I am the only one who took student loans. I got out of college with 14k in loans at an average interest rate of 6% that I did not have to pay interest on until 6 months after graduation.

I’ve got friends in their 2nd year with 2k on the credit card, and growing, paying ~30% interest.

They say they don’t believe in taking out loans for their education. Am I missing something here? Isn’t that credit card essentially the same thing, but you’re paying more?

By: Matt Fyffe

Matt Fyffe — Thu, 23 Apr 2009 12:44:36 +0000

It’s interesting to see the relationship between students and credit cards. It took me a really long time to finally get a card myself, it just was never something that seemed necessary.

I’m surprised at how much credit card debt most students leave with though. Considering these students also have tons of loans, they’re facing a lot of debt.

By: Henry

Henry — Wed, 22 Apr 2009 22:05:51 +0000

“A third of students rarely or never discuss credit card use with parents.”

The problem is that at least some of those parents are just as bad with their own financial management.

By: Rob

Rob — Wed, 22 Apr 2009 21:12:46 +0000

It would be interesting to see the credit card habits of the parents of the 1/3 that rarely or never discussed credit card use with parents. I’m not saying discussion would necessarily be a bad thing. But given that most Americans are in a heap of debt, there’s a good chance that these students picked up some of their financial habits from their parents, whether discussed or not.

By: Baker @ Man Vs. Debt

Baker @ Man Vs. Debt — Wed, 22 Apr 2009 19:54:11 +0000

Wow, those statistics are staggering. I’m really surprised at the number of student whom have a credit card even before college! I would have never guessed it to be that high, which I guess is not a good thing.

By: Nate @ Debt-free Scholar

Nate @ Debt-free Scholar — Wed, 22 Apr 2009 18:43:28 +0000

This is a great article! I probably will use it in my next “Top Ten Posts” contest.

Thanks,
Nate