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Study Shows Many College Students Carrying Credit Card Debt |
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Monday, August 18 2003 @ 08:38 PM EDT
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 Average Student Has Five Credit Cards
College students in Oklahoma have an average of five credit cards and are carrying $3,754 in consumer debt, according to a new study.
The study, conducted by the Center for Student Affairs Research at the University of Oklahoma, surveyed 4,000 college students at Oklahoma's 25 public colleges and two private schools.
In addition to consumer debt, the survey also looked at student debt from loans, vehicles and housing.
Student loans are the top source of debt followed by mortgages for nontraditional students and car loans.
Figures from the state's credit card report are similar to a recent study of credit card use by Nellie Mae, a national student loan lender.
In 2002, Nellie Mae surveyed 600 college students 18 to 24 years old. The study said the average college senior had six credit cards, said Marie O'Malley, Nellie Mae vice president of marketing.
Ninety-six percent of seniors surveyed had credit cards and the average debt was $3,262.
"Credit cards are so easy to use," O'Malley said. "A lot of students don't seem to understand compounded interest. Some see it as free money."
The Oklahoma study found that 50 percent of freshmen surveyed are showing up to campuses with credit cards already in hand, said Matt Hamilton, registrar at the University of Oklahoma, one of the participating schools in the survey.
"I hope this is a positive sign that parents are sitting down and saying, `There is a great responsibility with a credit card, so heed our advice,"' said Hamilton, who also serves as OU's associate vice president for enrollment and financial aid service.
The official findings should be released this fall, said Gerald Williamson, the vice president of student services at East Central University in Ada.
Rest of the article.
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| Authored by: Gold-Investor on Saturday, June 05 2004 @ 08:05 PM EDT |
Awash in credit card debt - Spending was easy, now overextended consumers fight to pay up
ANURADHA RAGHUNATHAN
In 1998, Wes W. was charging gas, grocery and dinner bills on his credit cards. He said he never thought twice about it. Today, the 40-year-old technology executive rues those easy swipes as he reels under the resulting $22,000 in credit card debt. "A lot of it was my own irresponsibility," said the Lewisville, Texas, resident, who earns $72,000 a year. When his wife quit her job in 1998 to stay home with their daughter, they didn't adjust their lifestyle. "We were living on credit cards for a year while we were trying to be new parents," he said. But now that debt, in combination with his car loan and his mortgage, overwhelms him. "It's scary," he said. "I am taking it one day at a time." And because he's in the dreaded tech sector, which has suffered thousands of layoffs, there's "lots and lots of prayer."
Financial Pressure
Debt counselors say many consumers - overextended on their credit cards - are struggling to pay their debts. Consumer debt nationwide rose to a whopping $1.7 trillion in April, up 7.3% from March, according to the Federal Reserve. And, in a classic case of spending more than you earn, the nation's household debt for the first quarter of 2003 was at 108% of disposable income - the highest number since 1990, Economy.com said. Meanwhile, the personal savings rate has dipped to a near-historic low of 3.8% of after-tax income. "There is a substantial amount of financial pressure among households, and it is getting worse - not better," said Mark Zandi, chief economist at Economy.com. "The household balance sheet is very fragile." Credit card delinquencies are on the rise. "The reason to be particularly concerned is because the erosion in credit is occurring at a time when interest rates are at record lows," Zandi said.
Tying roofs into loans
Experts say the mitigating factor in this debt swirl is low mortgage rates: Consumers have been able to refinance high-interest credit card debt into lower-interest home-equity loans. But the danger is that they are tying the roofs over their heads into the loans. And when they can't manage the payments, many lose their homes. So, what does all this mean for you? If you're not overextended on debt, vow not to let it happen, even if credit seems cheap. While it seems like second nature to put everything on the credit card and worry about it later, step back and think of the years and years it will take to clean up after yourself.
Rest of the article.
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| Authored by: Gold-Investor on Saturday, June 05 2004 @ 08:10 PM EDT |
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