(U-WIRE) GREELEY, Colo. -Junior business major Karina Rausch got her first credit card when she was a freshman.
Two years later, Rausch said she is $800 in debt.
“I just kept charging it ’cause I thought I’d have enough money, but I never did,” she said.
Rausch said she only makes the minimum monthly payment on the card because that’s all she can afford.
Sara Allen, executive director of Consumer Credit Counseling, said Rausch is part of a growing majority of college students who are sinking into debt.
Allen said about 11 percent of customers Consumer Credit Counseling see are younger than 24.
According to Colorado Public Interest Research Group (CoPIRG), 49 percent of Colorado’s college students have more than one credit card, compared to 37 percent nationwide. Nearly one half of students with credit cards paid a late fee at some point, and the percentage increases with the number of cards owned.
With credit card companies opening booths on campuses across the nation, students easily can sign up for a credit card. At the University of Northern Colorado, students can obtain a Wells Fargo Bank student credit card, which they can tie to their Wells Fargo checking account.
“Credit card usage seems easy when you first start using it, but once you start making minimum payments, you realize you might never pay it off,” Allen said.
Allen also said the majority of student debt during college doesn’t come from student loans. Because some loans are deferred payment, students don’t have to deal with those until six months after graduation. Instead, debt often comes from students who acquire a credit card once they go to college and work very little.
Adding to the problems, Allen said, is that some “get-out-of-debt” services charge high fees for consultation. But Consumer Credit Counseling offers free counseling to college students. It receives its funding from both the United Way and Weld County.
According to CoPIRG, 61 percent of UNC students are unaware of credit counseling available on campus. No one surveyed had used any. Additionally, 88 percent of students signed up for a credit card because of free items given away at the booth.
Allen recommends seeking advice quickly to avoid credit card debt.
“Counseling can help make budgets or stop students from sinking further in debt,” public relations major Natalie Mitchell said.
Mitchell recently transferred from the University of Georgia and said she is lucky she never got a credit card.
“I would never open up a credit card myself as a student,” Mitchell said. “I don’t know the value of a dollar. My parents pay for the bill.”
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