True or False: Parents Are Responsible for Their Child's Credit Card Debt
False! Mom and dad don't have to foot the bill. If a student is over the age of 18 and it's their own credit card they are using, mom and dad are out of the picture entirely. Mom and dad don't have to pay a penny towards the debt. On the other hand, if mom or dad co-sign for the card, it's an entirely different story. Then they have to foot the bill or put their own credit rating at risk.
True or False: The Average Student Credit Card Debt is Minimal
False! Undergraduates have an average outstanding credit card debt of more than $2,000. That's not counting student loans or other debts. Considering most college students work part time (if they work at all) that's quite a hefty figure.
True or False: Student Credit Cards Have Higher Interest Rates
True. Student credit cards do have higher interest rates than those intended for people with good credit. It's not uncommon for students to pay an interest rate of 16 or 17 percent, whereas consumers with good credit can often find fixed rates of 10 percent or less.
True or False: Student Credit Card Debt Accumulates From "Frivolous" Charges
False! Forget the stereotype about students charging up their cards with kegs and pizza. The average student charges things like groceries, gas and other necessary living expenses. If a student can't manage a job and educational demands at the same time, they tend to use credit rather than income to pay for their living expenses.
True or False: There Are More Students Without Credit Cards Than There Are With Them
False! If you think the number of students with credit cards outnumbers the number of students without them, you're sorely mistaken. The majority of college attendees are getting themselves into student credit card debt as we speak. Just how many are there? It's estimated that more than 75 percent of undergrads currently hold at least one student credit card.
So there you have it - the truth, the whole truth and nothing but the truth. Student credit cards are in abundance, available at every turn. The key is in educating students about the truths of student credit card debt, and how to avoid the pitfalls.
