"Avoiding Credit Card Debt"

College Degree or College Debt -- by Jennifer Merritt

As a graduating senior, I have one last will and testament for freshmen, sophomores and (if it’s not too late), even juniors: STAY OUT OF DEBT (i.e., credit cards).

One of the first tests of adulthood is managing money. It seems as if college students, even the best and the brightest, are failing the test year after year. According to a recent study conducted by Nellie Mae Corporation, the country’s largest nonprofit provider of student loans, the average college student’s debt had more than doubled from $8,200 in 1991 to $18,800 in 1997. The survey reported that undergraduates have an average credit card balance of $2,226!

As a college student, I’m positive you didn’t need those statistics to know that there is a serious problem with credit card debt on college campuses. Believe me, I’ve had my own personal run-ins with those little plastic parasites. Don’t get me wrong, it’s good to have a credit card for emergencies.

For example, one year I was coming back to school from Christmas break, and I got a flat tire. It was a big relief to know that my credit card was available to purchase another tire. However, that was an emergency; for some reason, I don’t think a new CD player constitutes a dire emergency.

I have a friend (who would kill me if I mentioned her name) who admits that she consistently misused her credit cards. The first mistake she admits is that she applied for too many. Let’s just say that she needed two wallets AND a purse to carry around all the credit cards she had.

We can all learn from her mistake and use these six simple solutions to help you avoid the pain and humiliation of credit card debt:

1. Keep the number of credit cards you own down to one.

And this card should be used for emergencies only! A department store card does not qualify here.

2. Make sure that the one card has a low interest rate (less than the Mob’s market rate).

Ask your parents or someone with financial common sense to help you find one.

3. If you can, get a card that requires you to pay the entire balance off at the end of the month (i.e., American Express).

That will definitely keep your spending under control.

4. If you can’t afford to pay cash for an item you desperately need (other than an emergency item) then don’t get it.

Oh you’ll be mad initially, but you’ll thank me for the decision later.

5. Avoid the following blood-sucking credit card expenses at all costs:

Christmas gifts (Merry Christmas Mom, I’m in debt), computer game CDS, going out to eat (starving today is better than owing tomorrow), clothes, gas, out of town trips, music, concert tickets, or any other vice you might have. Just say NO!

6. If you just can’t keep your hands off that one credit card, put some water in an old coffee can, drop your credit card in the can, and freeze it.

Therefore, if you ever have to use it, you will have to wait for the card to "thaw" out. Let’s hope by that time you would’ve come to your senses.

Another friend of mine said that she actually thought credit cards took the place of money, but what she later realized is that eventually you have to pay for all that stuff. Now I know you’re thinking that this person must have been some kind of idiot. But as my friends and I look back at the situation, we can laugh, because we realize just how immature we really were.

Sadly, as we face debt, it’s too late to go back and change what we did and didn’t do. My advice to you is to find out everything you need to know about credit cards before applying for or using one. In fact, you should treat a credit card like a gun. Because if you don’t learn how to use it properly, somebody can end up getting hurt, and usually it’s the owner of the weapon.

If you already own one of these "lethal weapons," and you’ve found yourself in debt, there are many sources available to help you. I’m sure RealWorld University will direct you to the right sources. Hey, they got me to share my story with you, didn’t they?

Just remember, you’re in college to get a degree, not to create debt!