If you are a student, the school costs including tuition fees, transportation cost, book’s price, must be making a dent in your limited allowance. Besides that, the demands of a hot and happening social life like branded clothes, expensive outings and hangouts can also weighs on you pretty heavily. The inadequate allowance from your parents invariably fall short to cover these expenses and you are left with one last resort, yes you guessed it right credit card. However, the freedom of using plastic and the delay in paying the bills make it easy to overspend on credit cards, especially for full-time students who have a limited income or no income at all. Soon this unwise spending habit leads them into huge credit card debts. If you don’t want to graduate with high credit card debts alongside your student loan debt, look for some other alternatives to get a debt relief. Read on to know more explicitly in this regard.
Credit Card Companies
Credit card companies have long targeted college and even some high school students and are well aware of this trend of college students to quickly build up high balances. In fact a New federal legislation came into effect in 2010 to restrict credit card companies from issuing cards to students under age 21 without an adult co-signer or proof of income. However for grown up students, financially independent students and those whose parents trust them enough to co-sign, credit cards are still a common source of overspending.
Reasons
The low introductory interest rates of credit cards often rise over time and make it harder to pay down the loan balance. Sometime, if the students default on their payments due to towering interest rates, the late penalty fees add up the total amount of money owed. Colleges and universities often arrange for financial counseling services for their students but students never pay any heed to such attempt and fail to learn about responsible spending.
Alternatives
College students can certainly evade this problem that come from credit card usage by looking for other ways to mitigate their educational and discretionary expenses. Students can take a part-time job which won’t hamper their studies in any way. You can earn a few extra bucks by working as a summer intern or local restaurant steward. If you want to make money online, you can work as a freelance writer or affiliate marketer as well. You must cut up your credit cards and start using checking account and debit card instead. Finally, you can use student loan funds, which are restricted by the lender, to pay for essential expenses like books, course fees, and accommodations. You can take help of student credit cards as well, which require a parent or guardian to serve as a co-signer, and generally offer low credit limits but it can help you to meet your immediate cash need and build your credit in the long run.
For students already in credit card debt, transferring the balance to a credit card with a lower interest rate or following Dave Ramsey’s snow ball strategy might help. You can consult a credit counselor for expert help and advise in this regard.