Facts of the Month

Avoid Using Credit Cards for College Expenses

Undergraduate students today rely far too often on high-interest rate credit cards to pay for everyday expenses. In fact, over 75% of undergraduates have credit cards, and according to a 2008 survey conducted by market-research company, Zogby International, 10% of graduates finish college with more than $10,000 in credit card debt. While often easy to obtain (and definitely easy to use!), these cards typically carry high interest rates and require immediate repayment if students want to avoid the accumulating interest that can make a credit card such an expensive proposition. Be sure to explore and expend first all low-interest rate federal student loans available (like Stafford student loans) before looking to higher rate sources such as credit cards to pay for college-related expenses. Also keep in mind that failure to pay credit card bills on time, as well as carrying high levels of debt, can drastically weaken credit scores that will be important someday when looking to buy a car, a home or a water park!

Publication Date: August 2008