Credit Debt Can Plague College Grads

July 08, 2004

College. Mandatory classes, parties, tuition card debt? These days college students have more to worry about than just passing their classes. For many college students, the credit card curse has become an all too familiar burden.

After high school, college students are bombarded by credit card marketer's trying to sign them up for high interest credit cards. In an hour between classes, students can talk to one of their professors, grab a bite to eat, and apply for a credit card at one of the booths set up by recruiters on campus.

Malcus Calloway a 2004 graduate of Clark Atlanta University has dealt with his share of recruiting by marketers. "I've seen [credit card recruiters] giving away t-shirts, candy bars, and toys, people are enticed by them," said Calloway. In their never-ending pursuit of customers, some card companies have even called student's homes up to three times a week.

A major problem students have with owning a credit card is that they may not read the fine print. High interest rates and costly annual fees are just a few of the add-on's placed on cardholders. For many, the combination of reckless spending and overlooking pertinent information has amounted to heavy consequences that affect them even after they graduate.

Richard Bwoodzie received his first credit card during the first semester of his first year in college. "I was trying to establish credit," said Bwoodzie who graduated from Georgia State University this past May. The Biology, Pre-Med student now owns two cards and uses them everything from online purchases and car repairs to tuition payments and other expenses. He insists that one reason some students end up with large credit debt after college and others do not is that they may lack self-control. "Some people may not be able to differentiate a need from a want," he said.

Too often, the appeal of plastic money is too hard to pass up for students with little to no income. Many have the false impression that they have access to money anytime; however, they may not realize that the money has to be repaid, eventually.

For those in need of reconstructing their credit, The Georgia Society of Certified Public Accounting (GSCPA) has some advice. The organization, which provides financial counseling for Georgia residents, suggests that students take the first step in rebuilding their credit by keeping track of their spending. A monthly budget including categories for rent, utilities, insurance, food, transportation and entertainment will help students' set-aside money for debt payments.

Students should calculate how much they owe and put the money they set aside for debt payments. The GSCPA says students should pay off the cards with the highest interest rates first. Making the payments on time, and paying more than the regular monthly minimum are also vital steps in rebuilding a negative credit report.

One simple step the GSCPA suggests that students do to take charge of their credit debt is replacing credit cards with debit cards. By doing that, students will have to think about how much they have in their account before they spend.

Rather than spending carelessly, students should take precautions in college to avoid bad credit when they graduate. Calloway's advice is simple, "if you have credit cards, use them only when you need them."

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