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Chattanooga college students grapple with credit card debt

Over the last several years, the topic of mounting national credit card debt levels has been a recurring conversation. A recent study indicates that this is a widespread problem, affecting many age groups. Despite efforts curb excess credit card debt among young adults, it seems as though many in Tennessee, and throughout the country, are struggling to pay their monthly bills.

A recent study published by the International Journal of Business and Social Science reveals just how big a problem debt management and debt relief is among young people, particularly students. Unsurprisingly, the study showed that 70 percent of college undergraduate students have a credit card, while 96 percent of graduate students have a card in their name.

The most illuminating aspect of this study showed that even though most university students have credit cards, they are unsure how to manage their debt loads. Overall, only 10 percent of young adults with credit cards knew their interest rate, late payment fee and over-balance penalty. At the same time, more of those surveyed knew at least one of those important facts about their credit card, yet the number of students that know basic information about their card is rather low.

Congress has even taken action to protect students from accumulating too much debt under the provisions on the Credit CARD Act, which requires those younger than 21 years of age to have a co-signer or prove they can make regular payments. Despite the change in regulations, students still know very little about the terms of the cards they hold and use on a regular basis.

Knowing that college tuition is continuously rising, it is not surprising that more and more students are using credit cards. As students feel constrained by their budget, they use their credit card and it is understandable how their debt can accumulate to a point that they are unable to make monthly payments. This examination of college credit card debt shows that many students are in a position to benefit from knowing all available debt relief options as their personal debt loads become burdensome.

Source: Debtmerica Relief, "College kids struggle to get control of credit card debt," April 16, 2012

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Mark T. Young & Associates
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