College Credit Card Debt, Can't Resist the Allure? Just Play By the Rules and You'll Be Fine!
College credit card debt is getting to be quite a problem for students these days. They go to university thinking they will make the best of it with no knowledge of how to manage money. They just know they have the plastic money to tide them over and think that with a job when they graduate, there will be time enough to pay the bills.
Little do they know that this does not happen in reality for research has shown that the average college credit card debt is $2200.00 with high annual percentage rating. The longer it is paid off, the worse it gets. That is why parents have to teach them how to manage money before they get the plastic one. Or put some kind of link in The Student Handbook to where they can learn about this.
There are rules to follow in order to protect these cards:
Budgeting will help avoid problems. Create a monthly budget that includes the amount to pay for the plastic money. Check the bills every month and compare them to the budget. Make adjustment if necessary. Make sure your debt does not go over 10% of the money coming in. If it does, then stop using it.
Be responsible with the credit you have. Remember the agreement you made when it comes to payment. Pay on time so your credit history will remain intact and that the interest you pay will not go up.
Know and follow the limit on the credit given you. Spending more than this limit will get you into trouble. You will have to pay a fee and incur some penalty beside. You could even lose your card privileges. In fact, keep the expenditures below the limit so you will have something to fall back on for emergencies like car repairs and health emergency.
Be on time when paying the bills to reach the lender by the payment date. Write the date due on the calendar using one week before as the due date so your payment will have time to get to the lender on the due date. Any slip up will be considered late and will be reported on your credit history. You will also incur extra fees, penalties and more finance charges.
Know that the minimum payment you make is what the company expects you to pay but if you want to lower the interest you pay, you have to pay more than the minimum due on the college credit card debt.
Let the lender know if you move to a new address as this may make you late in paying the bills because by the time the statement is forwarded to you, it may make you late with your payment. Anytime you cannot make payment, contact the lender and make arrangement with them so you can keep your credit rating intact.
Just paying the minimum amount due could make you pay as much as $1,115 on interest on a college credit card debt of $1000 at an annual rate of 18%. It could take more than twelve years to pay this off. And worse, if you fall behind, there will be high fees to pay.
Plastic money is good to have as you will have a credit history that will allow you to get the lowest interest rate. But one has to be responsible in its use and know all the ins and outs. Otherwise, the trouble will be around for years. So learn the rules for dealing with college credit card debt.
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