Easy Ways to Avoid Credit Card Debt in College

Unnecessary Borrowing, and Excessive Lifestyle Spending Can Add up

Aug 11, 2009 Christopher Pascale

College is often sold to young people as an experience. In the eyes of creditors, it is one that should be indulged in with little foresight.

When parents send their children off to college, many do so with the hope that their boys and girls will go off, experience life as they never have before, and return as men and women ready to conquer the world.

One unfortunate reality of college is that most students leave the nest with little education on financial matters despite the fact that they will have millions pass through their hands in a lifetime of earning.

The result is that most students end up in debt while in school. Some, while being encouraged to have a credit card, do not earn any money while doing so, leading to a lifetime of servitude to masters such as Visa, MasterCard, and Discover.

While credit cards are not going to leave campuses anytime soon, there are two simple ways for students to relieve themselves of paying 20% or more over several years for things that they shouldn't have to.

Rent, do Not Buy, Text Books

Publishers come out with new editions of text books every year or two. While some new editions are needed, most are not. For example, how much is going to change when it comes to algebra and art appreciation in the next five years? How about French or German? Not much, and probably not anything.

Buying an earlier edition of a text book can save students much money, but at the pain of lost time trying to find out how the author(s) rearranged the chapters. For math, even if the same problems are used, they'll be out of order, and homework assignments will be done incorrectly.

For this reason, a better alternative are rental sites, such as Chegg.com. Students can pay as much as $900 a year for books. Rental sites can save students nearly half that even when compared to discounted prices on Amazon.com. That's $1,800 over four years, which is 2/3 of the $2,700 credit card balance the average college student is holding.

Cal Tech Professor Offers Text Book for Free

An even better alternative to renting is downloading books when available. Some professors, such as Cal Tech's R. Preston McAfee, have made their texts available for free as Word documents. McAfee feels that the industry is out of control, and since professors do not bear the cost of the product, they do not mind sending their students to buy it.

McAffe, a professor of economics, compares professors to doctors in the manner that doctors do not have to share in the cost of the drugs they prescribe.

The other unnecessary expenses students take on involve their lifestyle.

Renting an Apartment Versus Staying in a College Dorm

As students finish their freshman year, it is not uncommon for them to desire more private accommodations. Dormitory neighbors can be loud, immature, and disrespectful.

To make it even more enticing, students are often offered apartments that make their share of the rent equal to that of their dormitory, but with amenities such as a semi-private (share with roommates) bathroom, living room, and kitchen.

The additional expenses thrown upon the student (or the student's parents) is that of groceries and utilities. If the grocery bill is a meager $200 per month split three ways, then each student would be on the hook for almost $67. Over 10 months, the food cost per renter would be almost $670. When students buy their own groceries for one year plus buy books from the school store for four years, they will spend about $4,200.

When students do not work at all, or only work part time, it is nearly impossible to pay off the entire balance every month, especially since living off campus requires a means to get on campus.

Renting an apartment may be done for reasons other than money, such as unsafe dorms, but there is no reason a student should pay full price on a text book if he does not have to. Most text books are not needed for reference in one's profession, such as a future psychologist taking algebra, or a future nutritionist studying music. Renting text books can easily save students over $1,000, and maybe $2,000.

Staying in the dorms while enjoying the food in the cafeteria (most people in the world live on less) can allow one to graduate with no credit card debt.

Sources

Starkey, Jonathan. "Rent, Don't Buy, College Text Books". DenverPost.com.

Ramsey, Dave. The Total Money Makeover. Thomas Nelson.

Cohen, Noam. "Don't Buy That Text Book, Download it Free". NYTimes.com.

"Financial Traps for College Students". YoungMoney.com

The copyright of the article Easy Ways to Avoid Credit Card Debt in College in Personal Budgeting/Finance is owned by Christopher Pascale. Permission to republish Easy Ways to Avoid Credit Card Debt in College in print or online must be granted by the author in writing.

Renting Books Leaves Cash for Other Things	Buying Text Books Will Empty Your Wallet	Credit Companies Help Buy Books at 20% Interest
College is Often Sold as an Experience	Few Leave College Wihtout Credit Card Debt