Do you know the difference between credit cards vs student loans? If you have a bachelor’s degree you can earn nearly twice as much in your lifetime as a person with only a high school diploma (Longley, n.d.). Get a masters degree and you can earn even more (Longley, n.d.). Go all the way with a post-graduate degree and you can earn more than four times when a person with a simple high school education earns (Longley, n.d.). But at what cost? And how do you pay for it?
Finding the money to go to college can be a challenge. The government has some great programs for grants and loans, but sometimes even those aren’t enough. Of course, when you are young the entire world is laid out before you.
You feel as though you have a lifetime to grow up, save money, pay off debt and so forth.
Knowing that education is important you might feel justified in using credit cards to help pay for school and even supplement your income, but should you? The short answer is that no, you shouldn’t. The longer answer is that you shouldn’t do it if you can help it. And the longest answer is that if you feel compelled to do so then you need to be very careful about how much you spend.
Grants, scholarships and other money gifts are always the best way to pay for college as this money does not have to be paid back. Remember, while your education is important you need to be careful how much you compromise your financial future by racking up debt.
For most students, student loan debt of some sort is unavoidable. When this is the case government loans, like the Stafford Student Loan, are the best. These have government mandated low interest rates and favorable terms. Private student loans and using credit cards as financing are both to be avoided. Why? High fees. Few protections.
Stafford loans, for example, offer you varied options for payments and even, in some cases, loan forgiveness, things that private loans and credit cards do not offer. Perhaps the only positive that credit card vs student loan debt has is that you can bankrupt out of credit card debt, but that is not something you want to build into your plan. But credit cards and student loans are very different things. There are also differences in credit card interest vs student loan interest – usually student loan interest is lower.
When it comes to credit cards vs student loans, student loans win, hands down. Using credit cards might make sense for things such as books or activity fees, where it is convenient to pay with credit cards. But do your best to charge as little as possible and pay it off as quickly as possible. Avoid charging tuition, if at all possible. Avoid “living off” your credit cards while you are in school. Remember, when you graduate it may take longer to get a good job than you realize. Many people end up working low level jobs for minimum pay for a few years before they find a well-paying job in their field. Do not set yourself for failure later by over extending yourself now.
Of course, having a credit card of some type is important. It helps you to build your credit, makes it easier to pay certain school related and travel fees, and can help you out in case of emergencies. If you haven’t established credit yet consider a student credit card. These cards usually have lower credit requirements and can be a good way to begin building credit that will serve you well for a lifetime. But credit cards vs student loans? Student loans, all the way!
Longley, R. (n.d.). Lifetime earnings soar with education. Retrieved from,
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