Discover the American express to debt
Vickie Perez
Students are generally known for not having any money and doing whatever they can to survive financially while attending college.The cost of living has increased in the past few years causing many students to use student loans and credit cards for basic needs such as rent, food and other school expenses.
Students risk accruing large amounts of debt during their college years since most charge what they can’t afford to a credit card.
A student who wishes to remain anonymous said that she didn’t know how credit cards worked when she first applied for one and had no idea what an annual percentage rate was or what the fees were.
She attributes most of her debt to irresponsible spending.
“I decided that living a lifestyle that focused more on material possessions was more important. I was using my credit cards to take trips to Vegas.I also used my credit cards to impress my friends by picking up the tab at dinner or the bar,” she said.
Mary Jo Clark, a bankruptcy attorney, said that most students don’t use credit cards responsibly due to lack of education.
“I think that debt education is important and I think that it would be great if our society would place more value on the rewards of investing time to save money to buy something with cash, versus the instant gratification from the impulse buy that they will spend years paying off over time,” Clark said.
Other factors that can attribute to large amounts of student debt are loss of employment and poor budgeting skills.
Joel Newell, a bankruptcy associate attorney, said that some know how credit cards work but are forced to put living expenses on a credit card if they recently lost their job.
“Some students graduate from college and they put monthly expenses such as a car payment on their credit card. With unemployment rates rising, the income goes away and they are unable to pay the debt,” Newell said.
Most young adults decide to file for bankruptcy when they find themselves unable to keep up with their credit card payments with debts ranging from $5,000 to $25,000.
Both attorneys recommended budgeting and financial counseling when students feel that their debt is getting out of control.
The anonymous student previously mentioned had $71,000 in credit card debt alone when she decided to file for bankruptcy.
“Never be afraid to learn from others and ask questions.
“My mother filed bankruptcy when I was in high school. Of course, I never thought about asking why she had to file bankruptcy or how credit cards worked.
“I wish I would have,” she said.
