The Impact News

Issue date: 5/15/05 Section: News

Media Credit: Armando Reyes College students must beware the debt that credit cards could bring about.

Visa, Master Card, American Express, and Discover are among the most common names found in a student's wallet these days. In recent years, more and more students are becoming accustomed to paying for most of their needs with a credit card.
The concern over credit card debt among college students has been increasing at a fast pace. A recent study by the Nellie Mae Foundation of Higher Learning has shown that both the number of students owning a credit card, as well as the amount of debt held by students, has risen significantly over the last few years. In most states, students are eligible for credit cards when they are 18 years-old, without parental consent and sometimes without a verified record of employment. There are many concerns that these students are abusing this sense of "free money", which a credit card can encourage, and thus will have to carry the burden of high debt for much of their lives.
Stephanie May, 21, a student in her second year of college, has found herself already in debt.
"I started getting all of these come-ons in the mail for credit cards, and now three years later...I have three and they are all maxed out. I make the payments, but then I put stuff right back on".
May has three credit cards which all carry a substantial balance, adding up to about $2,000.
"I blame no one but myself, but I do wish that I had been better informed before I signed up for these plastics," she said.
A recent study fn students in a four- year institution, aged 18-24 years old, showed that 83 percent of students have at least one credit card. Another survey indicated that 47 percent of college students have four or more credit cards each. According to the New York University Bulletin of Undergraduate Finance, the majority of undergraduate students have an average balance of $1,000 or less. It also showed that 13 percent of students have a balance of $3,000- $7,000, and nine percent of students had a balance of over $7,000. By graduation, most students have almost doubled their debt and nearly tripled the number of cards they hold.
Although there are students who use their credit cards wisely, there is an increasing rate of students who are becoming extremely deep into debt during their college years. This in turn results in a substantial amount of bills to be paid after graduation including student loans, which can be a nightmare in itself.

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