I remember fondly my college days. But I'm not so fond of the credit card debt that followed me for many years. I wasn't in college for a month when I received that first credit card. I immediately went shopping for the things my parents couldn't afford -- name brand clothing, new and expensive shoes and to decorate my dorm room. Years after receiving my degree I was still paying for those credit cards. If only I knew then what I know now. If you have $3,000 worth of expenses on your credit card -- from nights out at the bar or pizza in -- it will take you approximately 36 months to pay off the balance at $100 a month at 10% interest. Since no one ever gets a credit card rate under 10%, unless they are very lucky, you can expect to pay for your credit a lot longer. Chances are that you won't have anything you bought on that card after three, four or five years. The key is to never take out a credit card in the first place unless you know that you can resist using except for emergencies. It can be very tempting to use your card just once -- a thousand times. If you can't pay off the balance with every statement, you are charging too much. And you will pay a lot in interest. For the same convenience of credit card without the risk of interest, you can take out a debit card that gives you instant access to your money. You can only spend as much as is in your checking account. Find ways to save money on things. Look for coupons. Don't buy your own alcohol. Go to matinees for movies. Buy used text books. Shop around for the best cell phone deal. Carpool for spring break or vacation close to home. Many college students come back from spring break with $1,500 worth of debt. If you work earning $10 an hour full-time, it will take you a month and a half to earn enough money to cover your spring break. However, it will take you over a year to pay off the debt if you charge it. You have to think about your future right now. You don't want to get out in the real world and find that your debt is costing you that nice apartment, new car or professional attire. |
