How to avoid the high interest rate credit card trap on campus

TORONTO, ON, August 17, 2016 – The hot and hazy days of summer are coming to an end signaling the start of thousands of college and university students getting ready to head back to school in the fall. Students will be trading their beach ready flip flops for sneakers. However heading to campus also means a higher risk of racking up hundreds to thousands of dollars of high interest rate credit card debt.high interest rate credit card

When students head back to campus, they will be greeted by various credit card issuers incentivizing them with free gifts – all of which can appear harmless at first. However university and college students are the cream of the crop to credit card companies. How so? They make a lot of expensive purchases for tuition, books, clothing and food. Most of these purchases are on a high interest rate credit card. And because many students do not have a sense of financial literacy, they end up treating their credit card as free money instead of thinking of credit as a loan which needs to be paid back.

“Campus life is filled with many opportunities from getting involved in a variety of extra curriculars to making everlasting friendships. The dark side is when students accept offers from high interest rate credit card issuers without considering the repercussions of living on credit,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada.

“Don’t get me wrong, having a credit card is not a bad thing. If you use your credit card responsibility, you can establish a good credit history which is a plus when you go to apply for a car loan or mortgage many years down the road,” says Schwartz.

Although there are many benefits to credit cards, students on college and university campuses need to think, is credit really necessary? Can a student live without a credit card?                                                                                                                                                                                                                                                     “Higher learning can be expensive however it will present you the key to your future. However while you are in school on a limited income, it is important not take on more debt than you already have. Maybe now is a good time to adapt a cash only lifestyle and live frugally,” says Schwartz.

Consolidated Credit Counseling Services of Canada understands the financial burdens college and university students are under; to help students manage their debt while pursuing a higher education, students can use the following tips to stay ahead of the class:

Shop around

Don’t fall for the incentives and freebees. It may cost you in the long run if your interest rate is sky high. Instead look around for a credit card with a low interest rate and low fees.

Read the fine print

Behind the bells and whistles, you have an interest rate to be aware of. Understand your credit card agreement and the penalties involved for missed payments. Missed payments will affect your credit score.

Take it all off

Pay off your credit card balance on a monthly basis. When you leave a balance, interest will be applied to it. Remember that awesome deal you charged to your credit card?  It will end up costing you more the longer you carry the balance on your credit card. Not much of a deal now is it?

When are you due?

It is always a good idea to pay your credit card bills 4 to 5 days prior to the due date. This way your payment will arrive on time and not two days after it’s due.

Get help!

Spending money you don’t have can be addictive for some students. Nothing feels better than going on a shopping spree after a rough exam. If you are tired of struggling to stay on top of your debt management – seek the guidance of a trained credit counsellor. They will help you create a budget to live within your means.


About Consolidated Credit Counseling Services of Canada, Inc.:

Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.

For more information or to request an interview with Jeffrey Schwartz, please contact:

Natasha Carr, Community and Public Relations Manager, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041, C: 416-830-4720, F: 416-915-5200, E: [email protected]

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