Study shows how credit card debt affects graduate students…
A newly released survey, “Graduate Students and Credit Cards in 2006: An Analysis of Usage Rates and Trends” by Nellie Mae, a leader in debt education and financial management for students, shows that graduate students average $8,216 in credit card debt. The survey also reports that 93% of students wish they had learned how to handle money earlier and would like financial management education now. “Graduate students are apparently doing what the rest of the nation is doing: using credit cards to sustain their lifestyle,” says Gail Cunningham, vice president of business relations for Consumer Credit Counseling Service of Greater Dallas.
The study also indicated that the more time spent in graduate school, the more likely a student is to increase their level of credit card debt. 94% of respondents used credit cards to pay for some portion of their education expenses, primarily on textbooks – 28% paid for part of their tuition with plastic. On average, older graduate students carry almost twice as much credit card debt as their younger counterparts – $12,593 vs $6.479 – with the average rate rising 10% since 2003. Only 20% of all graduate students pay off their monthly balances.
Although right around the national average of $8,000 per household, graduate students are at a huge disadvantage and are likely to get even further in debt once they finish school. Marie O’Malley, spokeswoman for Nellie Mae, advises students to charge only what they can afford on credit cards, make payments on time and always pay more than the minimum required. She also suggests paying for big-ticket items such as tuition with student loans which have lower rates and easier repayment options.