Credit Card Debt among College Students

Imagine applying for student loans, credit cards and graduation all in the same year. Sounds great, use the credit cards to pay off the students loans so you can graduate. Easy, but according to Lucy Lazarony at Bankrate.com, the average college student has about $2200 in credit card debt. That’s not even including student loan debt.

As I began researching information on this topic, I started thinking about my own debt. Along with 83% of students, I too have one or more credit cards. My dad always said one of the greatest gifts he could give me was for me to graduate college without any debt. It’s wonderful that I’m fortunate enough to graduate college with no student loans to pay off ten, twenty years from now, but I will be graduating next year with credit card debt. I never thought of a couple hundred dollars in unpaid payments on my credit cards as debt. That’s a scary thought.

Gerri Detweiler, education Adviser for Debt Counselors of America said that it would take a student more than 12 years and $1,115 in interest to pay off a $1,000 bill on a card with an 18 percent annual rate. Twelve years and $1,115 in interest! I’ll be 32 years old and still paying for a bill at The Kent from college. It really puts things in perspective when it costs you more in interest then your original bill.

According to a Collegiate Case Study done by USA Today, “In 1999 alone, an estimated 461,000 Americans younger than 35 sought protection from their creditors in bankruptcy” and that was almost 10 years ago. What has happened to our generation that we have to seek bankruptcy as our last resort? Here’s a thought, we can start understanding credit card debt and perhaps cut back and even use cash!

This phenomenon is affecting college students nationwide. Undergraduates and graduates are both affected by student loans, credit card debt and high interest rates. I think education and awareness is a must in attacking this problem. People can get caught up in the “plastic era” simply because they aren’t directly affected by the transactions. They don’t see what is actually happening, sometimes until it’s too late.