Tackle debt before it tackles you
Students are away from home with little income and yet so many spending temptations. It’s no wonder college campuses are a breeding ground for credit card use and eventual debt.
Eighty-three percent of undergraduate students owned a credit card in 2002, according to Nellie Mae and e-wisdom.com. Those numbers have increased, with each student owning an average of 4.25 credit cards.
Without adequate knowledge about credit card use, students open multiple cards for the instant gratification of new purchases. What they don’t realize are the effects the charges have on their future.
“You can shoot yourself in the foot,” says Scott Lowe, professor of finance in the College of Business. “Every dollar you spend is being tracked.”
But not all credit cards are bad: they do help build credit if used responsibly. Often, students open credit card accounts for “emergency” use only. The trouble comes when deciding between an emergency and a new shirt for the weekend.
How to Avoid It
“In one word, discipline,” says Lowe. “Learn to say no. It takes a mature person to do that, though.”
Alumnus Nate Thorp, who graduated in 2004, avoided credit card debt in college by using only the money he had saved in his checking account.