Credit Card Debt and College: My experience

I remember the first time I ever signed up for a credit card.  And yes it was in college.  I thought it would be so cool to get one.  I was totally oblivious to the terms of the credit card agreement.  I didn’t know how much interest I was charged nor did I understand how to calculate it.  All I knew is that I had a low monthly minimum payment. It didn’t change too much as the debt grew.

I also had a college friend that told me that I could simply go to the bank and take out cash.  I tested her idea and sure enough I was given $200 for a cash advance.  I was naive to what was happening. 

I called the credit card company to see if they would increase my the limit on my balance.  They did several times until finally I hit a plateau and could barely afford my monthly payments being a student.  Several times I was charged fees for going over that limit.  Plus my balance never seemed to go down because I couldn’t really afford larger payments.  So it was like a continuous cycle.  I would make the payment but then charge something.  Of course, at times I would go beyond the limit for my balance and get charged extra.  To me, I was in this crazy, never-ending cycle that felt like a monkey on your back. 

Yes, I did pay for one college class with my credit card. I think that it was on a separate credit card.  I was desparate to take the class.  To this day, I don’t even remember what the class was that I thought I had to charge hundreds of dollars.

This story is probably typical for what a lot of students have experienced.  Today, the credit cards that I had in college are completely closed out.  I remember calling the credit card companies and telling them that I wanted to close my accounts.  That is what I had to do at the time.  These old accounts were completely paid off.

My advice is ………

1) understand the terms of the credit card agreement. I as a college student had no clue what I had gotten myself entangled with.

2) know how to calculate interest. This is helpful for loans in general.

3) I know of some people who have credit cards and use them very wisely. They pay off the balance each month to avoid accruing debt. 

4) educate yourself on the traps of a credit card.  There is a reason why the credit card company only requires a low monthly minimum payment.  They are not interested in you paying off debt.  They are interested in keeping you in the debt cycle. I was also snared by the fact that the credit card company would honor my requests for a higher balance.  They wanted my debt to grow.

Charlotte