Credit cards can be a good way for parents and students to help manage money while in college and to handle emergencies. But if credit cards are not used carefully, students can rack up credit card debt, often with a high rate of interest. This can lead to financial hardship - often causing students to drop out of college - leaving them with no college education and a mountain of debt.

Current Student Credit Card Picture

  • Among college students, 76% have credit cards and 56% have four cards or more.

  • 21% of college seniors carry a credit card balance of $7,000 or more.

  • The average credit card balance among college students is $2,327.

Before You Apply for a Credit Card

  • Get all the free money available to you in the form of grants and scholarships.

  • Student loans are another good way to help pay for college. But borrow only what you need.

  • If paying back your loan is difficult, help is available through HESC's Advocate Unit.

Ten Ways to Manage Your Credit Card

  • Before you apply, know the terms. Read the small print.

  • Choose a card with no annual fee.

  • Avoid cards that offer free merchandise; they usually come with a higher interest rate.

  • Be wary of low "teaser" rates that may only apply for a few months - and then a much higher rate kicks in.

  • Look for hidden fees, such as late fees, over-the-limit fees and cash advance fees.

  • Beware of buying credit protection you don't need. Federal law already protects you if your card is lost or stolen and a thief runs up a balance.

  • Don’t play the credit card shuffle — using advances on one card to pay down another.

  • Charge only what you can pay off at the end of the month.

  • Make monthly payments on time.

  • Always pay more than the minimum requested. Paying the minimum can result in paying two to three times more than the amount purchased.

      For example: Suppose you have a balance of $2,500, an interest rate of 19.9%, and your minimum monthly payment is $50. Assume you never use this card again and continue to make the minimum payment. Any idea how long it will take you to pay off your debt?

      It will take you 9 years and 1 month to pay this credit card off by paying the minimum. And you end by paying $5,450 for $2,500 in purchases.


    These links can help you better understand credit, credit cards and the impact debt can have on your life:
    US Federal Trade Commission

    National Federation for Credit Counseling

    Money Matters for Students