Christian Topic: College Students and Credit Cards

With so many outlets for creditors to reach students and few restrictions, credit card use among college students has steadily increased.
 
Leaving home for college is a turning point in your life. Suddenly you have all kinds of freedom—the freedom to stay out late, skip class if you want to, and make friends with people you’d never dream of introducing to your parents. You’ll probably have the freedom to get a credit card, too, which can be great for emergencies or establishing credit—but pretty scary if you over exercise your freedom to spend.

College students may frequently encounter credit card offers on campus and in their everyday activities. Credit issuers offer cards to students through the mail, campus displays, tables at athletic events, college publications, and flyers in bookstores. In most states, students can apply for and receive cards without their parents’ consent. With so many outlets for creditors to reach students and few restrictions, credit card use among college students has steadily increased.

The United States General Accounting Office reports that 64 percent of college students have at least one credit card. Among those, 42 percent do not pay their bill in full each month and carry an average balance of $577. Considering about half of the country’s college students graduate with $19,400 in student loan debt, credit card payments can be an added burden.

For students dreaming of a six-figure salary after graduation, this may not seem like much to repay. But CCCS Atlanta president Suzanne Boas warns against college students’ reckless use of credit cards.

“Putting off payments on your credit card bills can be much worse than procrastinating about studying for midterms,” Boas said. “If the bills pile up and you have no income, the interest on your debt will build and you’ll be faced with a larger payment than you bargained for.”

Makishia Kirkpatrick, a junior at Georgia State University, says she knows from experience the dangers of credit card spending while in college.
“As a college freshman, I was offered credit cards right and left,” Kirkpatrick said. “I had a part-time job, but I racked up too much debt and couldn’t pay the bills.”

Kirkpatrick found herself with nine credit cards—from major creditors, specialty stores and gas companies. The frequent calls from creditors about overdue payments finally became too stressful. She called a non-profit credit counseling agency, received confidential counseling and began a debt management program. The non-profit Christian debt program helped reduce her payments and see the light at the end of the tunnel. Kirkpatrick graduates soon and is headed for law school. However, she already has counsel for fellow college students:

“Don’t get in over your head by signing up for too many credit cards,” she said. “It’s much harder to get out of debt than it is to get into it.”

We offer the following tips for college students considering applying for credit cards:

Do Your Homework.
Don’t take the first credit card that is offered to you. Do some research to find a card with no annual fee and the lowest interest rates, in case you do have to carry a balance.

Keep it Simple.
Apply for and use only one card. With one card and one credit limit, you’ll avoid racking up too much debt. It also makes it easier to keep track of payments and how much you owe.

In Case of Emergency.
Use your credit card only for emergencies such as medical services, travel home or school expenses that can be paid off by your student loan, help from parents or a part-time job.

Study Your Options.
Evaluate your bill each month. If you find yourself using your credit card for everyday expenses like groceries, transportation and entertainment—you aren’t budgeting your money effectively. Talk to your parents, bank representative, or local clergy before making any decisions.

Get Real.
You’ve studied hard and plan to earn a degree that will guarantee you the big bucks. Aim high—but be realistic about your job prospects and the costs of living. Factor in moving expenses, rent, new clothes, transportation, insurance...you get the idea. Now add all that to your monthly payments for your student loan. Credit card debt is the last thing you need starting in the “real world.”

One last word of advice—save the shopping sprees and big-ticket item purchases for after college, when you have the income to pay for them.

Please fill out the Christian debt information request form on the right to request more information about our Christian debt programs.