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Undergraduate students' use of credit cards is at an all-time high. And so are bankruptcies amongst 18- to 24-year-olds. Students are often unaware of the difficulty in paying back even a small balance while in college, or just starting out with a new job. When students do pay on time each month, they often resort to the minimum payment which is designed to maximize interest.
Increasing numbers of students are being forced to drop classes and increase work hours to repay their debts. Some end up leaving college to work full time because of unmanageable credit card debt.
Other students graduate, but with a damaging credit report. Many students don’t realize how easily they can damage their credit report. A few late payments, or less than the minimum, can result in difficulties after graduation. A poor credit report has many potential negative consequences, including an inability to obtain credit in the future or to receive the best interest rate. Insurance companies have been known to increase premiums after learning of a negative credit report. It can also impact a student’s chances of being hired and finding housing.
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