College Advice Blog

Mar 10, 2012

5 Reasons College Students Should Avoid Credit Cards

Credit cards are often marketed to the very people who should not use them. The motive for this is a simple one. Credit card companies bank on those who can only afford to pay the minimum balance each month. Their profit is gained when interest is accrued. College students are a common target of the marketing practices of credit card companies for this very reason.

Though credit card companies have a very clear rationale for promoting their products to college students, these young adults should avoid credit cards at all costs. According to Sallie Mae, the average amount of debt among college students is steadily rising. Currently, the average college graduate leaves school with over $4,000 in credit card debt alone.

5. Credit Cards are Prone to Abuse
New college students generally fall into the same category. They are mostly 18 to 19 years old and are living away from their parents’ home for the first time. This newfound freedom sometimes has a high price. Without parental supervision or guidance, college students may make decisions they will eventually seriously regret. Choosing not to study may cause a poor grade on an exam. Using credit cards recklessly can cause financial hardships that snowball and wreak havoc for years to come.

4. Most College Students Only Pay the Minimum Balance
Credit card companies thrive off of those who cannot pay the balance of their credit cards from month to month. The interest that accrues on credit cards can build to monumental amounts. Indeed, many college students continue paying credit card fees long after they have graduated.

3. Emergency Credit Cards are Used in Non-Emergency Situations
Parents often believe they are making a wise choice when equipping their college aged students with emergency credit cards. These cards are meant to be used for unforeseen events like emergency medical expenses or vehicle breakdowns. There are better alternatives for emergencies. A financially healthier option may be to use a payday loan company. If a student needs cash today, they can use one of these companies to get cash fast without the allure of regular access to a credit card.

2. Credit Cards Create a Financial Burden for Parents
Entering freshmen can acquire credit cards with little to no income. Credit card companies issue these cards, sometimes with limits that reach thousands of dollars, knowing that most students have parents who will step in to pay the bills. When parents have no control over their children spending habits but also are aware of the ramifications of not paying credit cards, they feel forced to accept financial responsibility.

1. Bad Spending Habits Can Have Lifelong Repercussions
College students may not understand the vital nature of one's credit history. For first time students who likely have little to no financial background, purchases made with credit cards come easily and with no awareness of long term consequences. Credit reports affect nearly every walk of life, from taking out car loans to possible employment. A student who applies for multiple credit cards can damage their credit rating. One who defaults on bills can practically ruin it.

About The Author
This article was written by Matt H., a freelance financial writer for Cash Today. helps consumers who are in need of emergency funds get the cash they required fast.

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