Think you know everything there is to know about student credit card debt? You might be surprised. This particular credit card topic is a hot one and the myths run wild.
Mom and dad don’t have to foot the bill. If a student is over the age of 18 and it’s their own credit card they are using, mom and dad are out of the picture entirely. Mom and dad don’t have to pay a penny towards the debt. On the other hand, if mom or dad co-sign for the card, it’s an entirely different story. Then they have to foot the bill or put their own credit rating at risk.
Undergraduates have an average outstanding credit card debt of more than $2,000. That’s not counting student loans or other debts. Considering most college students work part time (if they work at all) that’s quite a hefty figure.
Student credit cards have higher interest rates than those intended for people with good credit. It’s not uncommon for students to pay an interest rate of 16 or 17 percent, whereas consumers with good credit can often find fixed rates of 10 percent or less.
Forget the stereotype about students charging up their cards with kegs and pizza. The average student charges things like groceries, gas and other necessary living expenses. If a student can’t manage a job and educational demands at the same time, they tend to use credit rather than income to pay for their living expenses.
If you think the number of students with credit cards outnumbers the number of students without them, you’re sorely mistaken. The majority of college attendees are getting themselves into student credit card debt as we speak. Just how many are there? It’s estimated that more than 75 percent of undergrads currently hold at least one student credit card.
Student credit cards are in abundance, available at every turn. The key is in educating students about the truths of student credit card debt, and how to avoid the pitfalls.