How to Be a College Student without the Debt

Attending college and getting an education is so important if you want to further your life and future career. Unfortunately, a lot of college students are finding out that debt follows them after graduation. If you’re a student who frequently spends cash and borrows without ever returning, you might be in for a surprise. This financial surprise can create a very difficult path to settling into a new life with a new career; when you have debt piling up and bills that need to be paid on a monthly basis, this makes life even harder. The best action for you to take is to educate yourself on credit cards and student loans so you can avoid major debt issues later on in life.

 

The Ins and Outs of Credit Card Debt

Credit cards are very easy to apply for and receive. Even if you do not have good credit (yet), you can still get a credit card and use it on responsibly. Credit cards act like cash for when you do not have any at the time of a purchase. Let’s say you need emergency car repairs and do not have the full amount to pay for everything at once. When you put the large amount on a credit card, you will then be able to pay it off in smaller increments once or twice a month when your bill is due. Understand, there will be interest added onto this bill, but if you pay off the loan within a certain amount of time, the loan could end up being worth the added interest. Credit cards are really useful for college students in an emergency, but they should never be used if you are just buying something that is a want and do not necessarily need.

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One of the major flaws of credit cards is that they come with an interest rate attached- as previously mentioned. Most credit cards have notoriously high interest rates, meaning that you will wind up paying more for your purchase through those small payments than you would have if you just paid for everything at the time of purchase. You need to understand how credit cards work before you apply for one. Every card has different rates, so do some research before you make a decision on which card you feel is a smart decision for your personal finances. This interest is what causes so much debt to accumulate, especially if you rely on your credit card for practically every major expense you purchase throughout college. While having a credit card can be handy in emergencies, too many college students use them for things that they do not need which can cause your debt to add up quickly!

 

Student Loan Debt Issues

Student loans are yet another thing that many college students usually apply for and wind up putting themselves into debt. Student loans help immensely by giving you one large, lump sum of money and allowing you to pay for books, tuition and room fees that you might need to pay for while studying at college. Just like credit cards, student loans can be a problem because of the interest rates attached to them. You will need to pay a percentage back on the loan each month, but there will also be a small interest fee attached to that bill. In the end, you will wind up spending hundreds, or even thousands, of dollars in interest, depending on the amount of money that you took out on the loan.

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It can be very difficult to avoid debt when you have both credit cards and student loans; most students use these tools to help them receive an education, so it is not out of the ordinary. The interest rates on both of these resources will normally be high for college students because companies that offer these need to protect themselves against problems that occur with people who have bad credit scores. Since most college students either have poor credit or no credit, many companies are skeptical.

Avoiding debt as much as possible should be your top priority as a college student because you do not want to graduate and have issues right away with paying bills. If you need a credit card or student loan, doing your research before applying for anything is essential and can help you to get a lower interest rate than if you were to go with the first thing that comes your way.

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