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Are Student Loans Better Than Credit Cards?
By: Nessa McHooley
When applying for student loans, it’s so important for prospective college
students to calculate their finances as best they can to receive the appropriate
funding. From tuition and books to room and board, living expenses and food,
students should make sure to secure the funds they actually will need to get
them through each semester at college.
By applying for the correct amount, students won’t find themselves in a bind or
get themselves into a credit card nightmare.
Way too many college students these days get into big trouble with credit cards.
It’s unfortunate that students too inexperienced to know better receive enticing
credit card offers in the mail. Usually when a credit card offer looms over a
student, it’s like dangling a carrot in front of a rabbit. The student grabs the
credit card offer without thinking ahead. Credit cards oftentimes appear to be a
quick fix or a type of “free money,” and they then become the remedy students
think they need.
Student Loans versus Credit Cards
If anything, it’s the opposite. Like student loans, credit card debt must be
paid back. There’s a huge difference though. Student loans usually are taken out
with fixed interest rates, depending on the type of loan and a students’ credit
rating, amount of loan, repayment terms, etc.
However, there’s usually a catch when students receive those “amazing” credit
card offers. The catch is sky-high finance charges, some as high as 22 percent!
However, oftentimes students don’t think about the finance charges when they
accept the credit card offers. It’s kind of like, “I’ll think about that later.”
Some students who haven’t taken out enough student loans to cover their college
expenses resort to credit cards to pay for necessities, books and even rent!
They’ll use their credit cards to take out cash advances, which usually have
even higher finance charges than by simply charging.
Never-ending Cycle of Debt
There are students who accept more than one credit card offer. After hitting the
limit on one credit card, it’s easy to accept another and then another, and so
on. With the high interest rates and finance charges attached to these credit
card offers, students easily can rake up more than they bargain for. When
students pay off credit cards by only paying minimum monthly payments, they are
making their financial situation worse. Finance charges accrue month after
month. It could take almost a lifetime to pay off the credit card bills.
About the Author:
This article is distributed by NextStudent. At NextStudent, we believe that
getting an education is the best investment you can make, and we're dedicated to
helping you pursue your education dreams by making college funding as easy as
possible. We invite you to learn more about student loans at http://www.NextStudent.com.
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