Debt Management Tools: Don’t Let Credit Cards Own You

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There’s no shortage of memorable events during college: spring break trips, the night you got that new car, and definitely the occasional house party or three. Of course, then you have to worry about how you financed all of those memories… and that’s when we bring up something you’d probably rather forget.

Credit card debt is an ugly beast. The average credit card debt owed by college student is about $3,000. Over a quarter of these college students owe more than $3,000, and about 10 percent of them owes over $7,000. Get yourself into that situation and you’ll need to get some debt management tools.

With all of that over your head, how do you avoid falling into the plastic trap during your college years?

Do You Need One?

The easiest way to avoid credit card debt is to not have a credit card. There. Glad we could make your life easier. We’re done.

In all seriousness, though: If you’re unsure of your capability to keep spending in check, pay your bills on time and in reasonable (preferably full) amounts, and if you just plain dislike the notion of debt — you may want to simply consider applying for a credit card later on.

Although they’re purpose-built for convenience, and a good way to build up credit, credit cards are also a great way to get into debt (and the perfect way to ruin credit). Check/debit cards are just as light in your pocket if convenience is your main concern, and do you really need that platinum Visa when you’re 21? In short, there are other options out there. Consider your needs carefully before you jump into the rabbit hole.

Choose Them Wisely!

Like finding a potential partner, choosing a credit card requires a decent amount of consideration. Don’t just grab one just because the sign-up table on campus offered a free pen, or because your friends are lauding the wonders of MasterCard. There’s a lot more to consider than just a thumbs-up from your room mates.

If you’re a college student, you’ve no doubt seen the stands of credit card sign-up offers across campus. Free T-Shirts, sweaters, pens, cell phone covers, you name the items from the 99-cent stores. They have it. Do not sign up for a credit card simply because of the goodies they offer, and in fact, avoid signing up a credit card at a stand altogether — chances are, you won’t be reading the card’s terms and conditions.

Your best bet is to compare and contrast the various list of student credit cards offers available on the web. Keep track of differences like their Purchase APR rates, their Annual Fees, the Late Payment and Overlimit fees, and their Purchase Grace periods. A bit much? Let’s break that down a bit more.


Take advantage of your student status. Many student credit cards have great rewards tailored just for you. These rewards are even better when you spend wisely and handle your credit responsibly!


Points and cash back. Choose between cash or great rewards.

Chase Student Card
0% APR for 6 months and 1 point per dollar.
Sign Up
Discover Student Card
0% APR for 6 months and up to 1% cash back.
Sign Up

For the APR rate, try to find a low fixed rate if possible. Keep in mind, though, that for most student credit cards a variable rate of over 16% is the norm. It’s high, we know! Look for a credit card without an annual fee — there is little reason for a student credit card to have an annual fee.

For the late payment and over-limit fees, take note of which cards may be the lowest or highest. Generally, a credit card’s late payment fee is around $39. Of course, if you never pay late or never go over your limit, this is a non-issue.

Finally, you should pay attention to the purchase grace period, which are basically the days where interest won’t be charged on a purchase (provided your previous statement was paid in full). The more days in your purchase grace period, the better.

Pay On Time, and Pay In Full

One sure way to put dings into your credit history is to pay your credit card bills late, again and again. These days there are multiple ways to pay your credit card, so you shouldn’t have to run into this problem. Probably the simplest and most sure-fire way to pay on time is to sign up for a credit card’s online account functionality, and have them automatically deduct payment from your checking account.

Remember, when you pay late, it won’t just ding your credit history; you’ll also get slapped with late fees. $39 isn’t a whole lot in the grand scheme of things, but multiple amounts of $39 can add up easily. Plus, put that cash in a bit of perspective: $39 is 78 tacos at Jack-In-The-Box. That could tide you over for a whole month! Throw in some Cup ‘O Noodles and Hot Pockets, and you’re talking real living.

You should also take note to pay your balance in full. Remember that ridiculously-high interest rate mentioned earlier? When you pay only the minimum balance, you’ll incur a large amount of finance charges.

For an example, say you have a balance of $2,000 at an interest rate of 16%. If you only pay the minimum payment of $50 every month until the balance is paid off, it would take you 58 months (or almost 5 years) to pay off the card! During this time, you’d pay an additional $877 in interest. That’s a lot more than just a few tacos and Hot Pockets.

Having trouble paying your balance in full? Watch your spending!

Understand that it’s a Financial Tool

Credit cards are one of many financial tools you’ll come across as you rummage your way through life. They’re not toys, though, so avoid treating them that way. Don’t get a card because its design is flashy, or because a salesman offered pens and a t-shirt with your signature.

Consider it this way: How many of your peers live with credit card debt? Do they enjoy having debt? Does it bother them? You don’t even have to ask, really, because the answers are all going to be “yes.” In short, don’t worry about getting that plastic just because it seems like the thing to do. If it makes sense for you, then follow the steps above to ensure you’re keeping yourself debt-free and in the clear.

Like we’ve suggested, getting a credit card is like choosing a partner. Think carefully if you need one, choose carefully if you want one, and spend wisely when you have one. The last thing you want is an ex-credit card stalking you for the next seven years, harassing you at every turn.

This post was written by Cap of


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