How to Survive College Without Credit Card Debt
A Credit Article Contributed by Joyce James
Be Prepared for the Great College Credit Card Push
When you make it to college your dream is to walk out of there with a good degree and good career prospects, but there's a strong chance you'll also end up with something you didn't count on: credit card debt.
College students are aggressively targeted by credit card pushers for one simple reason: College life is expensive and students are always strapped for cash. Be prepared for the credit card onslaught and don't get sucked in by all the gimmicky offers with their free gifts and promises of cash.
Plastic Addiction Causes Serious Credit Card Debt.
Credit cards are addictive because they seem to link you a supply of free cash. But it's an illusion!
When you use a credit card at the automatic teller machine or in a store to make a purchase you are borrowing money. Each time you get a cash advance or purchase something, imagine you are asking for a mini loan. These mini loans are collated on a monthly statement, sent to you from the bank. You are asked to pay all or some of the money you borrowed plus a little extra: the interest and other charges.
If you don't pay the entire amount borrowed in full each month, these interest charges keep adding up. And your loan ends up much bigger than the amount you initially borrowed.
Using Cash to Beat Credit Card Debt
If you use cash instead of plastic you can reduce the risk of credit card debt. At college your social life will demand an expense account. It may not seem like you are spending much on each social outing but a quick calculation in your head reveals that by the time you graduate your weekly lunch expense will become a mountain of credit card debt.
Consider Having a Debit Card or a Secured Credit Cards.
Debit and secured credit cards only allow you to spend what is already sitting in your savings account. You don't have access to the bank's money at all. These cards can be used just like credit cards as well as at automatic teller machines for those urgent late night cash injections, but whatever happens, it's always your own money that you are withdrawing.
The only way you can beat credit card debt is to buy things you can afford to buy, but that's easier said than done. With debit and secured credit cards, that is all you can do.
Understand the Benefits of Credit Cards and the Risk of Credit Card Debts
There are certainly many benefits to having a credit card. You are away from home, everything is new at college and you'd just feel safer if you had access to money at any time of the day or night. Credit cards can help you travel back home when you are homesick or help you meet unexpected expenses.
If you are going to use a credit card wisely, you need to budget. Tear a page out of your notebook and draw a line down the middle of it. On the left record all your income. On the right record all your expenses, including monthly repayments and stuff you will need. Don't spend more than what's on the left hand side. It's a crude system. But it works. If you need more income, get creative and look for ways to supplement your student income.
