As the University of Wyoming has recently adjusted tuition rates and costs to attend are increasing, how exactly do most students pay for school? It is estimated that 92 percent of undergraduate students use credit cards to pay for educational expenses and 30 percent of undergraduates use their credit cards to pay for college tuition. Ninety-one percent of undergraduates have at least one credit card, with the average debt hovering around $3,100 on those cards. When those students graduate from their respective colleges, graduates will amass almost $20,000 in debt. With those facts and figures, how can students stay on top of their debt without reporting late fees? How can they cut down the debt on these said credit cards? With the following credit card information, hopefully individuals will be more aware about the harm that credit cards pose.
Credit Limit — A credit card company sets limits on how much individuals can charge on a card. The limit is based on the ability to handle debt.
Grace Period — If you pay your bill in full during the grace period, you will not have to pay a finance charge on purchases for that bill. Grace periods are typically around 25 days.
Late Fees — If you are late on paying your credit card bill, you will be charged a late fee. Late fees can be as high as $35.
Interest Rates — When you use your credit card, you are borrowing money. Therefore, you will be charged interest whenever you do not pay your bill. Credit card interest rates can be 18 percent or as high as 24 percent, depending on your credit history and ability to repay.
There is no federal law regulating the rate of interest that a credit card company can charge. The federal government use to regulate it, but it was repealed during the Great Depression and never reinstated.
You can lower your interest rate with a simple phone call. Credit card companies are like cable companies. They are afraid you will leave and do business with a competitor. Use this to your advantage by comparing offers from other credit cards and bringing the information to your credit card company.
Be aware of universal defaults issued by credit card companies. If your credit card issues this feature, it will be stated on the disclosure statement of the application. Universal default allows credit card companies to automatically increase your annual percentage rate if you have late payments with another credit card company.
Remember, credit cards are a convenience. Stay on top of your spending and budget each month to pay off your credit card bills. Examine your monthly credit card statements as soon as they arrive and note the payment due date and any discrepancies. Staying on top will preserve your finances and credit score in the end.
