By: Charlie Holder
FAYETTEVILLE, Ark. (UATV) – Americans have $986 billion worth of credit card debt.
Accumulation of credit card debt by college students has become an issue nationwide. An internet search revealed dozens of sites specifically targeting college students and offering unsecured credit cards. Credit card companies have started targeting an especially vulnerable group of people: college students. Sponsors ranged from AT&T and Chase to MasterCard, Visa and Discover, but all encouraged college students to “start building their credit today.”
Nineteen year old Justin Griffith, is a student who is already struggling with credit card debt.
“I knew what it was, but I was like, free money,” Griffith said.
Like most students, Griffith said he felt like he was falling behind financially, which led to him getting a credit card.
“Being the youngest in my family, I was intimidated by them having their lives together. I just wanted to fast track to having my own line of credit and being financially stable,” Griffith said.
Getting a credit card to build your credit is the right idea, but credit cards are not as simple as that. Citizens Bank Market Manager, Tamara Phillips said credit card companies will reach out to you as soon as you meet the age minimum.
“All these card companies know your age, especially if you just turn 18 they’ll start extending you these letters of credit,” Phillips said.
Thirty-six percent of college students hold some form of credit card debt, 57% carry an unpaid balance month to month.
Although expenses can sneak up on anyone, credit card interest rates are often high and rising. Carrying a balance can add even more zeros to your budget. Working toward a zero balance will help you avoid interest charges.
Griffith said he had planned to use his credit card responsibly.
“I always told myself that I would just use it on gas, but you know, turned a page and I was like oh I can use it on anything,” Griffith said.
After having his credit card for a while, Griffith said the line between a need and a want got blurry.
“Deciphering what is a need and and what is a want, like what to use it for. That plays into why I am in credit card debt,” Griffith said.
While Griffith only has one credit card, the average college student has three credit cards. Phillips said having multiple credit cards will have a negative effect on your credit score.
“The more open credit cards and revolving lines of credit that you have, it is derogatory on your credit,” Phillips said.
Griffith said if he knew what he does now about credit cards, he would do things differently.
“Only use it and spend the money on it if I had the money to pay it right back off,” Griffith said.