Credit Card Debt Inhibits College Students and Graduates

Gregory Micek

Credit card debt is an issue that affects a large number of college students. According to Sallie Mae, 60% of students have been surprised by their balances, and 40% of students have made a purchase knowing that they did not have enough money to pay the bill. Cardratings.com notes that some students have amounted over $7,000 in debt on their credit cards and that the effects of credit card debt can cause students to drop out of university to pay for their bills or to have very low credit ratings after graduating from college. This source also mentions that credit card debt can affect relationships “as a result of financial stress” and can have psychological effects on students. Red Tape Chronicles, a part of MSNBC, released an article about Hernan Castillo, a student that graduated with “$5,200 in credit card debt and $30,000 in student loans to pay off.” The article states that Hernan Castillo regrets going to college because, although he graduated with an accounting degree, he does not see any hope of leaving his warehouse job. His large amount of debt and poor credit ratings prevent him from getting a job as an accountant.

Credit card debt can have a larger effect on students than the older members of the population because, as students begin to live life on their own and away from their families, they may be less conscientious of the rate at which they spend money in comparison to their older selves later in life. Students are also susceptible to credit card rates that appear to be better deals than most other offers because of their low initial costs. However, the rates may have higher interest than students realize at first, and soon students may find themselves in a serious amount of debt.