Apr 13, 2009 10:09 pm US/Eastern
Many College Students Have Major Credit Card Debt
BOSTON (WBZ) ―
With college costs rising, more and more students are turning to credit cards, pushing their debt to record levels. And it isn't just pizza and spring break they're charging; it's tuition, fees and books.
Sallie Mae, the college lending program, conducted a
survey of undergraduates and found the average credit card debt was $3,173. That's higher than any previous study. And 92 percent of student credit card holders say they charged textbooks, school supplies or other direct education expenses.
"My boyfriend has a maxed out $1,500 credit card right now," said Boston University student, Rachel Watkins.
"For a college graduate, it's not uncommon for us to see $10,000 to $15,000 worth of (credit card) debt," said Ali Mahood, a credit counselor with American Consumer Credit Counseling.
The study says 84 percent of students have at least one credit card. On average, students have four-point-six cards.
Elizabeth Crow, a 19-year-old Boston University freshman has two credit cards and one debit card. "I use them for when we go out to dinner and when I need to pick up smaller things at a convenience store."
Mahood says for small balances that a student can pay off each month, a credit card is a good idea. But for bigger expenses like tuition and books, it would be better to get a student loan, than to put it on a credit card. "The interest rates tend to be significantly lower."
Some students actually manage without a single credit card, like BU student Mitch Surette. "I feel like if I had a credit card, I'd spend it on stuff I didn't really need and that I'd get myself into a boatload of debt."
And that's an economic lesson we can all learn.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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