Credit cards are a common way for college students to pay for things at school. Too many students don't bother to apply for a good student loan because they think credit cards will solve their problems. Instead, they end up making a financial nightmare for themselves.
When applying for student loans, future college students need to figure out their finances as best they can so they can get the right amount of money. Students should make sure they have the money they need to get through each semester of college. This includes money for tuition, books, room and board, and food.
If students apply for the right amount, they won't find themselves in a jam or get into a credit card nightmare.
Credit cards are causing way too many college students big problems these days. It's too bad that students who don't have enough life experience to know better get credit card offers in the mail. When a student gets a credit card offer, it's like putting a carrot in front of a rabbit. The student doesn't think ahead and just takes the credit card offer. Credit cards often look like a quick fix or a way to get "free money," so students think they are the answer they need.
Student Loans versus Credit Cards
Rather, it's the other way around. Credit card debt has to be paid back, just like student loans. But there is a big difference. Most student loans have fixed interest rates. This depends on the type of loan, the student's credit score, the amount of the loan, how it will be paid back, etc.
But when students get those "amazing" credit card offers, there's usually a catch. The catch is that the interest rates are very high—some are as high as 22 percent! But most of the time, when students accept credit card offers, they don't think about the interest charges. It's almost the same as saying, "I'll think about that later."
Some students who haven't taken out enough student loans to cover their college costs turn to credit cards to pay for necessities, books, and even rent! They'll use their credit cards to get cash advances, which are usually more expensive than just charging.
Debt is a cycle that never ends.
Some students accept more than one offer for a credit card. When the limit on one credit card is reached, it's easy to get another one, and then another one, and so on. With the high interest rates and finance charges that come with these credit card offers, it's easy for students to spend more than they planned. When students only pay the minimum on their credit cards each month, they make their financial situation worse. Every month, finance charges add up. Paying off the credit card bills could take almost a lifetime.
