Yes Virginia, College Student Credit Card Debt is a Real Problem 

Author: Richard G. Keir

Let's face it, if you want to get into credit card debt, no problem. If you don't watch your budget and use your head, you'll be over it pretty quick and sinking fast in the quicksand known as "credit card debt." It's an equal opportunity disaster, treating everyone equally irrespective of whether you happen to be an experienced professional or a brand new college student. As a result, college student credit card debt isn't particularly uncommon.

Without some ingenuity, it's difficult for college student credit debt to reach the levels it can with other cards because the credit limits on college student credit cards tend to be much lower. Unfortunately, college student credit card debt can become an even bigger problem since many students are already in debt thanks to the loans they've gotten to pay for their education. If they graduate burdened with additional credit card debt, they've got to not only pay back their loans but also they've now got those college student credit card debts to deal with.  And while many education loans have a relatively low interest rate, the same isn't necessarily true for student credit cards.

Since most college students are inexperienced at using credit cards, they may make some fundamental mistakes. From choosing a student credit card to the patterns of use and the student's payment habits - all of these can help create a morass of credit card debt. In fact, one obvious reason that the limits are kept low by credit card companies is precisely this. Student credit cards are both a learning experience and a marketing gimmick.  First time credit card users may get in over their heads, but it is less likely with a low limit.  From the credit card companies perspective, the risk is fairly low and the chance of gaining a lifelong customer is very valuable.

College student credit card debt, assuming it eventually gets paid off, is a lucrative source of income for the credit card companies.  Unless you pay off your full credit card bill every month, you're feeding the companies even more cash and the real cost of what you buy with a credit card can be far higher than it seems.

The way to avoid college student credit card debt is no different than the way to avoid any kind of credit card debt. The primary thing every student with a credit card has to understand is that there is no such thing as free money.  To repeat - a student credit card is not a source of free funds.  Anything you buy has to paid for.  Your credit card company will insist on it and that bill really will arrive (and grow). Don't treat your credit card as if it were different than cold cash. Avoid over spending. Don't buy things just because they happen to be on sale.  Sales come and go and every time the offers tend to be better. If you can pay cash, do it. Use your credit card only for those things you truly need and be clear about exactly how and when you'll be able to pay the credit card bill.

Wishful thinking will get you in debt faster than you want to believe. You must have a monthly budget and it must be accurate. To stay clear of debt, you have to actually stick to your budget.  It's worthless if you don't follow it.  If you push beyond your budget limits once or twice, you can probably cut back to cover it and get back on track. If it becomes a habit, you're building a deficit that could become a serious problem over time.

With all the credit card offers arriving day after day, it can be very tempting to get a second or a third and then a fourth card.  Don't do it.  Sure the limit may be low on your one card, but if you don't have the income to cover more than that limit, you're asking for a major credit card debt disaster by getting additional cards.  It's probably the only way college student credit card debt can be built up to a ruinous level.  Temptation and impulse buying are a common trap we all can fall into.  Minimize your risk. One credit card should be more than enough.

A college student credit card is supposed to be a valuable learning experience and a safety net in case of real emergencies.  College student credit card debt is real and behaving responsibly is the only way to avoid turning that handy credit card into a thoroughly unpleasant financial mess.