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Credit Cards and College Students: Avoid Death by Debt

Is it any surprise that credit card debt among college students has increased nearly 50% in five years? Unfortunately, current circumstances in the world today: economic downturn, dried up loan pools, and increased tuition rates have created a recipe for extreme debt among student spenders. Undergrads and grads alike have felt the pressure of the credit allure. Some have even been forced to charge full tuition amounts at stifling interest rates.

Additionally, credit card companies are becoming more aggressive in their approach to attract students as potential patrons, disregarding many states’ restrictions on marketing to college students.

How can one avoid such plight of credit debt?

Sometimes the more obvious answer—saying no to credit cards in the beginning is not as feasible as one would hope. If you are in a position where credit cards are unavoidable, be discerning in the following areas:

1. Research and compare card details: APR%, Fixed/Var APR, Annual Fee, Application Fee, Grace Period, Late Fee, Rewards. etc.

2. Factor minimum balance at lowest possible APR% into your budget.

3. Pay more toward your balance per month, if possible.

4. Think ahead. Stay away from “easy” low minimum balances that hike up your APR. You will end up more in debt in the end than if you were able to maintain the higher minimum balance at the lower APR.

5. Stay away from arbitrary spending and multiple credit lines that will inevitably increase your debt amount.