Credit Card Debt

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Practicing responsible credit card use in college will save students from drowning in major debt years after they graduate.

They are a credit card company's favorite target and creditors bombard college students with attractive offers trying to lure them in.

"When I go to the mailbox, I probably get three to four offers per week; everyone having the same gimmick to sell," says Rock Valley College sophomore Nate Diamond.

"About two to three a week; they would all look professional, very tempting,” says Rock Valley College sophomore Chris Reid.

"About 90 percent of college students have at least one credit card, and 50 percent carry a revolving balance of $1,700 which they carry from year to year," says Heidi Berardi of Family Credit Counseling Service.

Rock Valley College students Nate Diamond and Chris Reid understand this situation all to well. Their credit debts are all paid off now, but they remember the debt stress vividly.

"When I first got it I paid the minimum balance only, so I started drowning in debt," says Diamond.

Credit cards carry a host of hidden dangers. If you're just one day late on your monthly payment you can be charged a late fee as high as $35, and on top of that, a card issuer will jack up your interest rate. Interest rates can range between 12 and 36 percent.

"The average person to pay off $8,000 in credit card debts, paying the minimum only, will take eight years to pay off the debt and will have paid almost $7,000 in interest by the time it's paid in full," says Berardi.

"When I first got it I thought it was like free money, went out and maxed it out on things I didn't need," says Reid.

But despite the hazards associated with credit cards, there is an upside for signing up as a college student. Berardi says it's important to establish a credit history while in school. Without a credit report, you'll have a tough time renting an apartment, buying a car or even getting a credit card.

Tuesday on 23 News at Five we'll have some important tips to help you get your credit back on track.