Credit Card Debt Is Common Among College Students

Young adults are going to college to learn, broaden their experience and meet interesting new people. No one aspires to a higher education to acquire long-term credit card debt. Nonetheless, more and more students are piling on debt at a time when they’re least able to make the timely payments required.

"The average credit card debt among undergraduate college students is about $2,748 an increase from $1,879 in 1998," says Debra Pankow North Dakota State University Extension Service family economics specialist. "The overall percentage of students who own four or more credit cards has increased from 27 percent to almost 32 percent within the same time period."

"By offering credit cards to students, credit card institutions are helping produce unprecedented numbers of credit risks who in the future will have difficulty qualifying for mortgages and other loans," Pankow says.

"One of the best approaches in helping your kids lead a credit-wise lifestyle is simply to talk with them about the consequences of irresponsible spending. Help your kids understand that their credit record, just like their high school transcript, can have a lasting impact on their lives."

A strong credit history is vital to a good financial future, Pankow says. "With student loans and credit cards, college students can start a good credit history by establishing their ability to manage and repay debt."

Parents can offer the following advise to help their kids with credit card debt.

• Live within a budget.
• Pay all bills on time.
• Keep accurate records of all finances.
• Carefully track how much is being charged to avoid overspending.
• Explain to your kids why they are such hot prospects. They do not want to get ripped off and will likely resent what’s behind the credit card industry’s hype.
• Instruct them to only use their credit card in emergency situations only. If they can eat, drink, or wear it, it’s not an emergency.
• Tell your kids what will happen if they run up bills they can’t pay.

By taking the time to consider what seemingly easy money now can mean, students can avoid long-term credit problems.

If you are interested in preventing credit card debt for college students, contact your local extension agent or contact Debra Pankow at (701) 231-8593 for more details.

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Source: Debra Pankow, (701) 231-8593, dpankow@ndsuext.nodak.edu
Editor: Richard Mattern, (701) 231-6136, Richhard.Mattern@ndsuext.nodak.edu
Writer: JJ Camarillo, (701) 231-8371, jcamaril@ndsuext.nodak.edu