Students find them in debt from various reasons. Amongst the most common reasons are student loans, tuition fees and overuse of credit cards. Interesting enough, credit card debt is rapidly built by students all over the world and the United States of America is an unfortunate leader in this problem. This article will try to explain the causes to this problem and hopefully help find proper solutions.
Why & How Do Students Rapidly Build Credit Card Debt?
Many students find them in credit card debt because of uncontrolled spending habits. Getting a diploma isn’t easy. It requires time, dedication and lots of effort. Therefore, many students can’t find time to spend setting up a proper budget. Their credit card is always available and an easy way to spend money. Time passes, requiring students to handle extra expenses such as buying food, clothes, books, personal appliances and from time to time enjoy themselves.
Due to the lack of proper financial budgeting they rapidly find themselves behind payments and in a position where they must use their credit card to live their life at the standard they are used to. This issue positions many students in debt.
Student Loans May Also Cause Debt
Credit card debts is known to be the most common problem amongst students however, many students find them in debt because of loans they have applied for in the passed. A student loan is usually granted to a student that needs money to pay for tuition fees, but can be used for any personal use. Some students, once found in credit card debt, apply for a federal or private student loan that will help pay off their credit card debt. After getting the money needed, they pay off the debt and quickly go back to the same life style, obviously finding them in debt once again.
Typical Solution: Student Loan Consolidation
Students that have obtained multiple student loans totaling $7,500 or more, have an option to consolidate them. By consolidating your student debts you can easily manage monthly payments and enjoy a fixed, often lower averaged interest rate. You can graduate knowing that everything will be fine. You have the time to find a job during grace period and slowly but surely pay back the loans.