Facts on college students credit card debt history
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Dont Save When You Owe Money.
 Humans are peculiar creatures. We don't always do whats right for us - rather, we do what feels best, and try to blank out any reasons why it might not be the right thing to do. Maybe that's the reason there are so many people who have both savings and debts.
Its a Matter of Psychology.
Yes, it feels better to have savings. Saving makes you feel like you're building a cornerstone for your future, while paying off debt feels like you're throwing your money into a hole. That money is for the kids education, or for improving your place of residence, or whatever else - and it's in an savings account realizing a useful rate of interest. What can be wrong with that? A great deal, if you are in debt.
Dont Be Fooled.
There are about no savings companies that will give you interest rates as high as the ones credit cards wrest from you. Heres food for thought: if you have $10,000 in a savings account bringing in 5% per year and $5,000 on a credit card at an interest rate of 20% per year, how much cash do you have? After only five years, the answer is effectively $0 - your owings would have grown to about $12,500, the equivalent sum of money that your savings are now worth.
You may not believe it now, but it really is a good deal better to pay off your debts. If you used half your savings to pay off that debt, youd be in such a better spot that it's really amazing. You avert five years of compound interest on the debt, but you still get to keep $5,000 in your bank account, earning interest - after five years, that's approximately $6,380.
If youd still rather keep your savings intact rather than using them to pay off your debts, ask yourself this simple question: is your pride worth $6,380 of your familys money?
Consider Your Financial Well-being.
When you have sufficient money to pay off your debt, theres absolutely no earthly reason to hang on to it. Debt is for people who don't have the money, and need to borrow it. Debt costs money, and savings make money - you need as much of your finances as possible to be savings, not debts. If your savings account and credit card are with the same financial institution, then youre effectively paying for the privilege of borrowing your own money from them. Why would you do that?
There are additional advantages to getting rid your debt with your own money. Youll be less worried about your debts, and your credit report will show that you were able to pay everything back - resulting in getting you a much better interest deal if you ever need to go into debt in the future.
I know it can be hard. You just have to be mindful that any cash you've saved hasnt really been saved at all. Its money you ought to have been spending instead of buying things with a credit card. Yes, it feels much worse to spend money thinking that youre spending away your future - but always remember that whenever you use a credit card to spend that same amount of money, youre spending away your future, plus interest. In any event, if you've got the debt, then that cash in the bank has already been spent - stop denying it to yourself.
College Student Credit & Debt Advice. Credit Card & Credit Report. Articles, books, advice on college student credit card debt how to avoid debt, Find out which cards can best help you build a good credit history. Credit Cards: College students carrying thousands in credit card debt Card debt hurts student loan repayments High credit card debt also says 54 percent of college students pay off their credit card balances every month.
Students and Credit Card Debt With student loans and credit cards, college students can start a good credit history by establishing their ability to manage and repay debt. Credit and Debt Basics for College Students-Credit Report, Credit. Credit Card Debt: A Survival Guide for College Students There is a middle ground in which students can build a credit history in college. Student Credit Cards Student credit cards can help both high school and college students build up Find out how to avoid student credit card debt and keep yourself protected.
CBS News Beware Of Student Credit Cards September 3, 2003 10:39:31 College students are prime targets for credit card companies, Students double their credit card debt and triple the number of cards in their wallet's. Student Credit Cards. Forbes.com: Find the best student credit cards that help college students build their credit Students can build their credit history plus buy all the essentials for. |
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