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Eliminating your Credit Card Debt

Bill Boyer

Issue date: 9/10/10 Section: News
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Although credit cards offer a great way to boost your credit score and track spending, companies prey on the uninformed and are great at extracting money from students. 30 percent of your credit score is based on how much debt you have. A low credit score could cost you tens of thousands of dollars in the future when you take out a loan for a car or house.
Although credit cards offer a great way to boost your credit score and track spending, companies prey on the uninformed and are great at extracting money from students. 30 percent of your credit score is based on how much debt you have. A low credit score could cost you tens of thousands of dollars in the future when you take out a loan for a car or house.
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Imagine you are an average college student: you enjoy hanging out with friends, you sleep till noon on weekends.Oh, and you also have $2200 in credit card debt, ($5800 if you're a graduate student). Although credit cards offer a great way to boost your credit score and track spending, companies prey on the uninformed and are great at extracting money from students.

College students frequently fall victim to credit card debt because they figure they will go into debt while in school and simply pay it off later when they get glamorous, high-paying jobs. What they don't always realize is that due to credit cards' absurdly high interest rates, this is extremely difficult to do. If you were to only make a minimum payment on a balance of $2200, it would take you more than 15 years to pay it off (assuming 14 percent interest).

If you have credit card debt, here are three reasons to get out now:

1. The interest is outrageous: Credit card companies charge you 14 percent, on average, for the cost of using their money. Compare this with the less-than-one percent you are earning from your savings account.

2. You are hurting your credit score: 30 percent of your credit score is based on how much debt you have. A low credit score could cost you tens of thousands of dollars in the future when you take out a loan for a car or house.

3. Credit card debt causes stress: You're already worrying about homework and whether or not it is worth going to chemistry class to see the blonde girl in the front - you don't need this debt lurking over your head.
Continued...
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    nicklas

    posted 9/10/10 @ 9:34 AM EST

    Excellent story. Students have got to remember that student loans aren't free money, though it seems like it when they give it to you. I have friends who used their student loan money to pay for everything from books to beer, and now their payments are killing them. (Continued…)

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    Issue Summary

    News

    • A conversation with Mark Chavis
    • Administration commits to increase traffic safety
    • CWRU promises diversity, lacks equality
    • Eliminating your Credit Card Debt
    • Filer system to undergo changes in near future
    • Uptown project breaks ground in University Circle
    • USG Brief

    Sports

    • Crew Team steers closer to boathouse
    • CWRU looks to dominate at JCU
    • Spartan football kicks off season with big win
    • Spartan Spotlight: Niro Wimalasena
    • Spartan XC dominates 10th annual Bill Sudeck Classic
    • Volleyball starts hot, cools down

    Fun Page

    • Fun Page Solutions 9/10/2010

    Opinion

    • Editorial: Halfway to equality for all students
    • Poor of wallet, not of spirit
    • State Your Case 09/10/2010
    • The war in Iraq is over�if you want it

    Focus

    • 29th Annual Studio-A-Rama festival to host Black Angels, nine regional acts
    • A trip to Ohio City
    • Cleveland Air Show dazzles, deafens city despite inclement weather
    • Cuzin' Dave Wilson of WRUW passes away, leaves behind legacy
    • Facebook nightmares redux
    • Hitting the Spot: Colour Revolt
    • Rock Hall receives $5 million endowment for upcoming reconstruction
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