How to Avoid getting into Excessive Debt when You’re a Student

If you are a student you might be vulnerable to racking up some pretty big debts. Students tend not to be experienced with money, nor have they really had to be on their own much. They might not realize that a 20 percent interest rate isn’t the best debt that they want to have to repay. Credit cards might be seen as easy money, but they should not be. What are some ways that students can avoid debt?

The easiest thing to do is to not carry a credit card. Carry a debit card if you must, but not a credit card. If you insist on having a credit card, you should get one from a credit union. They typically have lower interest rates and will have lower balances. This will stop you from spending money that might not be possible to repay. It will also help build a credit history if you can use it wisely. If not, don’t get it at all.

Have a budget that you can stick to. You know that you have to pay for books and food, so make that your top priority. Other than gas, maybe clothes and nights out, you don’t need to pay for much more. There is no need to pay for an expensive car, big screen TV or anything else unless you have the cash to pay for it.

Start paying down your debts by getting a job. Working even a few hours a week will help you feel more in control and less like a broke college student. Even better, you can pay cash for some of the things you want to buy and avoid having to get into more debt by using a credit card, or obtaining any other form of loan.

In fact, always pay cash when you are in college. There is really no need for a credit card until you have a full-time job, or steady employment after college. Paying cash will not only make sure that you are not spending money you don’t actually have, but it will teach you how to save money and how to manage it. Take classes if you need to in order to learn how to resist the urges of credit card companies. Most colleges will offer those courses and some make them mandatory.

Staying out of debt is something that anyone can do. All you have to do is to avoid credit cards and spend within your means. Get a job if you feel like you need some extra money as opposed to taking a credit card. You will know when you run out of money and you don’t have to pay interest on cash payments.