The Real Cost Of Student Credit Cards: Low Credit Scores

Before college, student credit cards were piling up in your mailbox waiting for a response. During college, you applied for two or more credit cards because you considered it ‘free cash’. Now, you are planning for your future before graduation. You realize you are in credit card debt because you mishandled your finances and you have a very low credit score. You apply for more credit to pay off your current debts, but you see these new cards have higher interest rates. Suddenly you realize…

It Is Not ‘Free Cash’

The ‘free cash’ mentality has crippled money management skills in today’s college student. With the growing debts of student loans, students are relying on their credit cards to surpass the harsh times. Very few have an idea of how much ‘free cash’ can harm their credit reports because of late payments or 19.06% annual percentage rates (APRs). ‘Free cash’ is not so free when you are paying ten dollars a month for two years for pieces of clothing you have only worn three times.

APR – Annual Percentage Rates

Annual percentage rates (APRs) are ruining the college experience and draining money from student’s pockets. Credit card offers with 0% APR for the first 6 months come as shock once students spend 70% of their credit limits. Why is this a vital point of interest? Students are not paying attention to the credit card interest rates. College students are placing themselves in jeopardy by accepting numerous offers without using credit wisely. In college, spending habits increase as students explore options (especially style-wise). Their purchases add up gradually… until the student defaults causing high interest late fees.

Late Fees

Student credit cards have very high late fees to balance their outstanding offers. College students whom default payments experience credit score drops, insurmountable debt, and problems with school. The number one problem with college student drop out rates is financial security. If a student finds themselves in debt, this extra stress keeps their attention off of school. Their interest leads to part-time jobs in which they work 20 hours a week to pay interest on their credit cards. At the end of the day, the student is concerned about their bills instead of their grades. Before looking at a new credit offer, maybe you should realize the true costs of credit cards.

Steps to Understanding Current Debt

1. Review your credit report.
2. Calculate outstanding debts.
3. Contact a credit repair specialist or debt consolidator.
4. Prepare a realistic payment plan.
5. Cut up your credit cards with the highest interest.
6. Remove bad marks off of your credit report.
7. Manage your money to rebuild your credit.

Your low credit score can hinder your opportunities for high paying jobs. According to recruiters, recent college graduates have a typical debt of $3,000 and they may overlook this issue. You should not take this very lightly because your low credit scores cause you to pay more to live. You will receive higher interest rates on housing, insurance, and credit lines until you rebuild your credit history. The time is now. It is time to manage your money wisely; you will thank your credit repair specialist and debt consolidator for their support.

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Source: http://www.articlealley.com/article_145132_63.html
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