Students Face Crippling Credit Card Rates – Reasons To Stop Using The Debt Generators

Students Face Crippling Credit Card Rates – Reasons To Stop Using The Debt Generators

Reports and studies reveal that the credit card lenders around the nation begin to salivate as the college students head to campus, though not as enthusiastically as they did before. It is true that the young adults used to be a powerful debt generating machine and this is why banks take full advantage of their habit. Then the Credit CARD Act of 2009 made many such practices that lenders used to lure and attract students within the college campus illegal. However, even with those changes within the system, college students still carry outrageously high amounts of credit card debt. In fact, they carry some of the highest annual percentage rates in the country, rivaling those of store credit cards.

Did the CARD Act Eliminate the Problem of Soaring Student Credit Card Debt?

Before the CARD Act came into existence, the college students could simply sign up for a credit card at the age of 18. But now individuals younger than 21 can’t be offered pre-approved credit cards. They require proof of income or a co-signer who is older than 21 years. But do these restrictions really make it tough for the college students to obtain plastics?

Post Credit CARD Act, the credit card companies were largely banned from their old tricks of handing out tantalizing gifts like pens, tote bags, T-shirts and Frisbees to entice the innocent students. But instead of offering them such tangible goods, the lenders moved towards using rewards to lure college students to spend more and more and incurring huge loads of debt at cripplingly high interest rates. So, what should be done about such bad financial habits? Should the young adults be motivated to stop using credit cards?

Valid Reasons to Stop using Credit Cards and Gaining Back Mental Peace

Yes, there are indeed plenty of good and valid reasons to stop using credit cards but most of us don’t ever take them into consideration. Credit cards can be great financial tools when they’re used correctly but once you start misusing them, they soon become nasty little debt generators that push you towards further debt. Here are some valid reasons to avoid using credit cards.

  • Less expenses: It’s no secret that when you use a credit card, you’re more likely to spend more than what you have decided according to your budget. Why not put a stop to all these extra expenses by bidding goodbye to your credit cards once and for all? When you spend cash, it’s pretty tougher to watch it leave your wallet than when you swipe your card. It is only when you use cash that you put some thoughts to your purchases. That’s the only reason to stop using credit cards.
  • Budgeting becomes easier: Another great reason to stop using credit cards is for easier budgeting. Following a budget and keeping tack on your cash flow is something that every individuals and businessmen should do. Experts also agree to the opinion that it is tough to budget when you’re using credit cards. Keeping track of your cash, expenses and earnings is much easy when all the transactions are carried out with cash. Whenever, you start using credit, calculations get messy and you start losing track of your expenses.
  • Increased privacy: This is an age where everything can be tracked through credit card usage and it’s safe to say that you lack even a bit of privacy when you use credit cards. Cash might be a bit low profile but it at least helps you preserve your privacy. Credit card statements even point out where and when your card was used and so when you have a nosy roomie or you lose your mail, your privacy is obviously at risk. Don’t you think that there’s no better reason to stop using credit cards?
  • Reduced debt problems: Credit cards are the biggest reasons behind you falling knee-deep into debt. Credit cards carry sky-high interest rates and hence when you start whipping your plastics for every single purchase, you start spending more than what you can afford and soon you realise that you won’t be able to pay back what you’ve incurred. This is when you start incurring debt. So, it is only when you stop using your credit cards that you can stay away from high interest debt and from the possibilities of taking out debt consolidation loans and running after credit counselors.

So, if you’re an young adult who has just stepped into college or may be stepped out of it, ensure taking the right financial moves. Your entire career will depend on the financial steps that you take as a responsible individual. Credit card debt spoils your credit report and this is one of the main things that your employer might check before employing you.