About College Students Misusing Credit Cards

College offers great opportunity, including learning about new subjects, meeting friends, cooperating with gifted professors, completing internships and studying abroad. But the college experience isn't free; in fact, it can become quite expensive when tuition, books, housing, food, transportation and recreation are factored in. Some students may come to rely on credit cards to bridge the gap between expenses and financial resources. While learning how to manage credit is a key financial skill, misusing credit cards can lead to lasting debt.

Debt

Credit card use doesn't have to lead to debt, although it frequently does just that. Credit card companies permit consumers to swipe away throughout a specified billing period; when that period concludes, account holders receive a bill specifying how much they've spent. When college students pay their balance in full and on time each month, no interest accrues. But when students aren't able to pay the balance in full, they must pay interest on the unpaid amount until it's completely paid off. Interest compounds over time, so that the overall debt balance grows. Interest rates can be quite high for cardholders with little or no credit history; many college students fall into that category. Regular misuse of ringing up large account balances without paying the balance in full results in large debt loads.

Statistics

On average, college students have 2.5 credit cards and carry an $885 balance, according to College Student Credit Card. At 17 percent, students who don't own a credit card represent a minority. Some students practice responsible credit card use; 55 percent pay off their balance in full each month. Financial pressures, including debt, cause 8.5 percent of college students to drop out. There's near-constant pressure to sign up for a credit card; college students receive between 25 and 50 solicitations each semester.

Financial Planning

Misusing credit cards can stem from poor financial planning. Rather than budget monthly expenses for rent, food, transportation and recreation, college students may spend haphazardly, augmenting student loans or personal savings with credit card swipes. Restrict credit card purchases for emergencies only or solely for monthly payments such as gym memberships in order to accrue good credit without overspending.

Fraud

College student credit card misuse can include fraud. It's not unheard of for college roommates to steal another's credit card for surreptitious use if cards are left lying around. Fraudulent charges can be hard to track when used in familiar locations, such as the college bookstore, campus pub or nearby gas station, since these charges won't look suspicious on your statement. Save receipts and track purchases at the conclusion of each billing cycle.

Prevention

College students can avoid credit card misuse by remembering that every purchase is a loan that they must repay with interest. Shop around for low-interest credit cards to avoid accruing steep interest payments, and request a low-balance limit to avoid overspending. Pay balances in full each month, and schedule automatic withdrawals from your bank account to avoid missing payments.