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College Credit Crisis
Avoid piling up debt while in college
 Related Resources
• Balancing Your Checkbook
• Money and the College Student
• High Cost of Using Credit Cards

More and more college students are getting into serious debt that has little to do with their education and much to do with their lifestyle and the use of student credit cards or student loan money to pay for basic expenses. Who knew that you'd still be paying off your pizza tab ten years after you graduate?

Often the excitement and sense of accomplishment that come from finishing your degree and starting out in the occupation of your choice are dulled by the discouraging realization that your student credit card debts and student loans are going to eat up all your disposable income, and then some. It's a real drag to work full-time making a real salary and not be able to afford a decent car, furnishings for your apartment, a quality wardrobe for work, or the latest electronic gadget.

If you ring up $3,000 worth of miscellaneous expenses on your student credit card, it will take you 36 months to pay off the balance if you pay around $100 a month at 10% interest, assuming you never charge another dollar to your credit card (how likely is that?). Chances are, you'll have little to show for the money. If you're like many college students, you used your student credit card or some of your student loan money to order pizzas and Chinese take-out, pay for your cell phone charges, buy more clothes than you need, and build up your CD collection.

To avoid spending a big chunk of your income after you graduate to pay off items that are only a memory, here's a word or two to the wise:

~ Don't take a credit card to college. It's far too tempting to use it for trivial items that will add up amazingly quickly. If you can't pay the balance off when the credit card statement arrives at the end of the month, you'll end up paying even more in interest charges.

~ Get a debit card. They're convenient. They give you instant access to your money. They limit your spending to what you actually have in your account. This is a good thing.

~ Shop around for the best cell phone deal. Avoid exceeding your free minutes. Calls over and above your allowable minutes are very costly.

~ Buy used text books. Who cares if they're not perfect? You can save a substantial amount of money over the course of your college education.

~ Skip spring break. Many students come back broke from spring break, which can cost you $1,000 or more. If you work during the summer earning $10 an hour, it will take you almost a month to net enough money to cover your spring break expenses. That leaves only a month and a half to earn money for the next school year.

~ Set up a budget. It not only helps you stay on track, it also gives you a feeling of control and the peace of mind of knowing you have enough money to make it through the school year.

~ Find ways to cut expenses. Browse local newspapers for coupons. Limit booze and cigarettes, which are two of the most expensive habits you can have. Find movie theaters that offer reduced prices, or buy movie coupon books that offer discounts. Take advantage of free or inexpensive activities on campus. Limit your purchase of CDs. Plan ahead so you can avoid incurring ATM fees. Leave your car at home and walk whenever possible.

These small sacrifices will pay off big in the long-run, and you won't be part of the college credit crisis.

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