On Your Side: Getting out of the debt trap

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News 12 at 6, February 1, 2008

COLUMBIA--College students are notorious spenders of their parent's money, but there are some ways to financially rope them in.

One of the biggest problems for graduating college students is the huge amount of debt they take with them along with their diplomas. But with some pre-planning and budgeting, that can change quickly.

Stephanie Owens is your everyday, average college student.
Lots of studying, lots of time on the computer and lots of spending.

"Wow, I really could have gone without that 5 dollar Starbucks trip." she said.

So, while she's balancing out her study time and social life, her parents wanted her to learn to balance something else, her finances. So they got her something called The Allow Card.

"It's so convenient. I can order stuff online, get gas, go to restaurants." she said.

All of that without the interest fees and late fees of a credit card and without the worry of overdrafting with a checking account. It's a prepaid debit card that parents control.

"I can call my mom, she puts the money on and it's done." she said.

The allow card isn't the only card like this, there's the Visa Buxx and a number of other similar cards available. If these aren't quite up your alley, pick something to help your student.

A recent survey says 83 percent of college students have a credit card. 21 percent of those have a debt between 3 and 7 thousand dollars, that's up nearly 2 thirds in the past 8 years.

You'll need some will power, but budgets and avoiding credit cards altogether will be a big help. Whatever you do, get some sort of plan ahead of time.

For Stephanie, her parent's plan has allowed her to enjoy her college days without too much financial worry..for the present or the future.

"I love it, I'm not ready to get out anytime soon." she said.

Get this, a thousand dollar charge on a credit card with 18 percent interest would take more than 15 years to pay off if you only make minimum payments.

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