Credit cards can lead to a lot of debt

Spencer Jones has had a credit card since he was 18 years old.

But he hardly ever uses it.

“I’m afraid to because I don’t want to run the balance up,” said Jones, a Kentwood sophomore.

Not enough people utilize Jones’ philosophy, said Charles Walmsley, financial planner and finance and law professor.

College students often run into problems with credit card debt because they use them for everyday expenses, Walmsley said.

“The biggest mistake college students make when it comes to credit cards is living beyond their means,” he said. “They tend to spend more money than they have.”

The average college freshman carries $1,500 worth of credit card debt, according to a 2005 study by student loan company Nellie Mae, and 56 percent of undergraduates have obtained their first credit card by the age of 18.

“Credit cards are very easy to acquire for college students, making credit card debt prevalent for them,” Walmsley said. “Credit card companies will relax credit standards to take on more customers at a higher rate, like college students.”

Bills should be paid at the end of the month and first-time users should have cards that don’t allow the owner to carry a balance and that have a low credit limit, Walmsley said.

“College students are often the target for credit card companies because they are on their own for the first time and are in control of their own income and expenses,” he said. “Having a credit card in their own name makes them feel mature, and it should — they just need to use it wisely.”

Pinconning sophomore Serena Wiltse only has a debit card, which works similar to a credit card but the money comes directly out of her bank account.

“Students who have credit cards are more likely to end up in debt because it’s (the card) easier to pay with when you don’t have the money right then,” Wiltse said.