The Facts About College Students and Credit Cards
SAT scores and high school transcripts can be used to prove that students are smart. College students are certainly bright enough to be accepted into the world of higher education. The question is, how financially intelligent are they?
The average college undergrad has more than $2,000 in credit card debt. According to the nation’s largest student-loan provider, the average college undergrad has $2,748 in credit card debt. Keep in mind that that is usually on top of any student loans. So these students will be graduating and entering the world of work with a debt already hanging over them. That makes it much more difficult for them to learn practical spending habits.
The four major contributors to student credit card debt are offers of unrealistic credit lines, increasing education-related expenses, peer pressure to spend, and a lack of knowledge about finances. The best way for students to protect themselves is to arm themselves with information and read any credit card offers they receive carefully, including all of the fine print.
Reducing expenses is one way for students to both prevent credit card debt and try to pay it off, but financial experts say you should start by consolidating all credit card debt onto the one with the lowest interest rate and then work to pay down that balance. The hard part is that you have to stop making new charges until you have reduced your credit card balance to a sensible and practical level.
They think that they’re always broke, but American college students in fact have more than $10 billion to spend. While that doesn’t mean that they actually have that much money, that’s how much credit is available to them. America’s college students control more money than the national debt of some small countries, which is a pretty sobering thought. Together college students in America spend more than $19 billion a year.
One area in which students seem to be more responsible than the general public is in paying their credit card payments on time. In fact, according to a survey by the Institute of Higher Education Policy, fifty-nine percent of students reported that they paid their balances in full and on time every month. This is compared to only forty percent of the general public.
For students – and others – who are looking for the best credit card option, a good bet is a credit union. The credit cards issued by credit unions tend to have the most favorable terms for the average consumer. If your university has a credit union, you may be eligible to join as a student. It’s well worth doing, if only in order to find the best credit card available for you.
Most people, including students, assume that banks hate it when you bounce a check.
The truth is that while they may frown the whole time, they are actually making money off of your mistake. Most banks charge nearly $25 to process a single bounced check.
There are actually big differences between banks, including credit unions, and so smart students will compare them carefully before deciding where to keep their money. This practice should apply to any financial dealing. As with any major “purchase,” the best way to find the best deal is to shop around.