The Stats – A Balancing Act
There’s a good chance you’ll apply for at least one credit card while you’re in college. Nellie Mae, a student loan company, reports in 2004 that 76 percent of undergraduates started their school year with at least one credit card. More than half got their first one before they were 18, and usage increased as they progressed through college. Like you, most of them were prompted by direct mail solicitation. By the time they reached their senior year, 91% of college students had cards, more than half having at least four! Join the crowd, but be careful not to become a negative statistic.
These days, credit cards are almost indispensible. The benefits of having an account are many – see below. But get this: The average outstanding balance undergraduates carried was $2,169. Only 21 percent paid off monthly balances completely; 44% reported paying more than the minimum but still carrying forward a balance, and 11% made less than the required minimum monthly payment. The balances student carried mounted as they progressed until, so that by the time they graduated, they had more than repaying student loans to worry about.
All being said, let’s spell out the benefits of credit card use and look at the hazards more closely.