Credit Card Debt In College
Students
College going undergraduates are the main culprits
who are creating frighteningly big sums of debt with regards to
credit card currently and with each passing day the problem is only
increasing. The everyday student holds about two thousand five hundred
dollars in debt related to credit card expenditure and till the
date they become graduates.
When the are stepping into their new lives and
a new career they are having debt which they do not know how to
pay off. These youngsters think of living a posh new live before
they have even started earning for it, which is totally opposite
of what they should be doing.
They think that when they start earning handsomely
repaying such debt shall not be a problem at all, whereas the fact
is that in a competitive environment like our salaries are not keeping
up with the kind of life style we generally adopt these days.
In such a situation repaying such debts related
to credit cards swirls out of hands before you realize it. And the
situation is bad for such students as they keep spending through
credits cards and then the repayment time just keeps getting delayed
even further. A small example will be enough to illustrate the grave
situation that faces such students.
If the student has a thousand dollar bill and
the rate of interest applied is at 18% yearly then in twelve years
he/she ends up paying $1,115 in interest alone to finish that thousand
dollar bill. And that’s just the tip of bad things to follow.
Certainly every credit situation as its pros and
cons, one way to look at it is that a majority of the undergraduates
have sparse credit ratings.
Therefore if they do have a credit card then it
could be the beginning of a positive credit history that can lead
to the fulfillment of higher expectation from life. But if they
are not aware of the dangers and the laws that govern using of credit
cards then they could be heading in the wrong direction.
College undergraduates faced with debt related
to credit card could face severe challenges. They will find it hard
to make the payments of their bills on a regular basis and then
face cash crunch too. Then it could affect their chances of gaining
a student loan.
In that case if the parents are thinking of using
their credit cards as the person authorized to use then if the students
doesn’t make amends then similar trouble could affect the
parents’ too and lead to grim credit issues. If the students
just take time out and understand the consequences of debt related
to credit card then the problem could be halved. Most college students
have a credit card debt; fifty-four percent do manage to pay the
monthly bills.
But the remaining 46% don’t and here is the
problem. It is important parent at home addresses such issues and
the right knowledge is imparted concerning money managing.
|
