As a bankruptcy attorney, and with my oldest beginning her freshman year of college, I am keenly aware of student debt. Obviously, many college kids have student loans. However, I am writing today to discuss credit card debt and college students. In fact, I recall an article about college kids and how they are racking up credit card debt. According to the article, a survey of 20,000 college students by AIG Retirement Services and EVERFI found that:
- 53% are charging purchases to two or more credit cards
- 38% do not plan to pay off their bill each month
- 40% say they currently have at least $1,000 in credit card debt
- 14% say they currently have at least $5,000 in credit card debt
Experts quoted in the article say that credit card debt is one of the worst types of debt. I agree with that opinion.
Dad & Lawyer
The responsible use of a credit card can be valuable to young people. Often, credit cards are the first step in the establishment of credit and a good credit score. However, looking at the survey results, it appears that the responsibility factor could use some improvement. As a dad, I tell my kids to address problems. As a lawyer, I know ignoring problems only make them worse. Therefore, college kids with credit card debt must make a payment plan. For example, they should (at the very least) make the minimum payment every month. Better yet, they should figure out a way to immediately pay off the credit card debt. Parents, talk to your kids and educate them on smart credit card use.
The Point of No Return
It may get to a point where the debt is insurmountable for a college student. Don’t fret, as this is more common than you may realize. For this reason, may bankruptcy is an option. There is no shame. Bankruptcy was created as a tool for good people to get out of debt – whether they made mistakes, or the debt came out of nowhere (think: medical bills). If anyone deserves a second chance, it’s a young person getting an education!
Keeping that in mind, please call me to discuss your situation. I will answer any questions that you have about credit card debt and college students. We can explore options to get you back on track to a bright future.