Christian Teen Credit Card Debt
Christian teen credit card debt has become a widespread problem in the United States today. It seems like anyone can get a hold of a card, teens included. Debts among teens have been on the rise for years. With college costs, cars and other necessities needed to eventually start a career, teens may not be able to automatically start paying back balances owed. This could create major problems for a young person when they want to buy a home or car in the future. An adult shouldn't have to continue to pay for the mistakes of their youth. "Flee also youthful lusts: but follow righteousness, faith, charity, peace, with them that call on the Lord out of a pure heart" (2 Timothy 2:22).
One can speculate why overdue balances among young people have become so prevalent. The cost of clothing and entertainment alone are so high that many hardworking, full-time employed find them hard to afford. Charging it to a card is an easy way to get desired goods without having to have money upfront. This mindset easily leads to large amounts of teen credit card debt . Financial burdens, with or without the help of parents, can be eliminated. Just like any other kinds of debts, teen credit card debts are serious and can leave a black mark for the future. With the help of debt reduction organizations, however, due balances can be lessened or eliminated.
A trap that may promote young people's spending on credit is one of low income, as most young people are students. Through banks or other sources, teen credit card debt could keep mounting because the young person is strategically paying one balance off with another. The first step in preventing this bad habit is to consolidate and turn all teen credit card debts into one low monthly payment. By combining them, the teen does not have the option to pay one with the other. Consolidation with an agency can lower the monthly payment 40-70%, making payments attainable, even for a student.
Young people spending on credit could lead to a life of unfortunate circumstances because of mistakes in adolescence or to a wealth of knowledge about money learned early, albeit the hard way. The best way to settle teen credit card debt is to have the teenager sit down with parents and fill out an application for consolidation together. This way, both the parents and young person are actively involved. As hard as this act may be for both parties, it is for the best. Many parents would agree that they, themselves, had a struggle with money when they began dealing with it and today's young people spending on credit is no different. Helping a young person out of teen credit card debts instead of punishment is better in the long run for the teen. In many cases, the teen already feels guilty enough because he or she was not aware of the extreme consequences or circumstances of mounting balances.
Student loan debt for many is the less desirable burden many students accumulated in college in addition to their diplomas. With the soaring cost of tuition, federal student loan debts average around $17,000. Many school loans, especially medical school loans, are over $100,000. In a slower job market with smaller starting salaries, conquering one's college notes can seem a daunting task since repayment of these debts commences shortly after graduation. There are several options to handling these notes.
It is very important to avoid having student loan debts become defaulted. Default loans are reported to credit card agencies and the government can pursue collection by garnishing wages and tax refunds. A bad credit score can hinder a young person for years, negatively affecting their ability to secure a car or home mortgage. Also, landlords, insurance companies and even potential employers are looking at credit histories to make decisions. Unlike other loans, student loans can not be erased by declaring bankruptcy.
If a person finds himself unemployed and unable to repay a student loan debt, it is important contact one's lender immediately. Once a note has become default, the options are much more limited. The debtor may be able to work out a deferment payment plan based on financial or other hardships, or the lender can discuss options with the debtor such as student loan debts consolidation.
Consolidation is a worthy option for many since it enables the debtor to roll the multiple notes into one note, often at a lower interest rate. Also, the repayment period can be extended to as long as 30 years as opposed to the standard 10-year repayment period a Stafford note carries. While this will increase the interest the debtor pay on the note amount, the monthly amount the debtor will have to pay out is much more manageable on a beginning level salary.
To help those conquer their obligations, the federal government has created several programs to make the repayment of loans a more flexible process. Programs offer income-sensitive monthly payments, where the debtor's monthly payments will rise as the salary does. The federal government has also established some attractive tax breaks to help make repaying the indebtedness easier. The interest on these notes interest is now tax deductible. There is also a note rehabilitation option for default loans that enables some of the penalties and negative information relating to default note to be removed from the debtor's credit once he has made 12 consecutive months of repayment.
Repaying one's student loan debt should be a high priority once a student graduates from college. If necessary, a student might consider delaying attending grad school until the student note obligations have been lessened or cleared. There are many flexible options for repaying the obligation, but it is critical to identify the right option for an individual before the loan obligation becomes default and creates additional problems for the future.
Christian College Student Credit Card DebtsThe college student credit card debt issue could be a problem for students who are already heavily burdened with loan fees. As students are targeted by credit cards offering funding at high interest rates and fees, these offers may be tempting. But, individuals are accumulating college student credit card debts and getting overwhelmed with the inability to make the payments. People should be coached and taught how to adequately handle financing and not become overwhelmed by payments and financing before even graduating from school. Debt should not be a burden to students graduating and embarking on new and responsible adult lives.
Many university students are becoming heavy laden with college student credit card debts. When exams and getting through a class should be a person's biggest worries, these individuals are finding collection agencies and the other stressful results of debt accumulation as the main concerns. Heavy college student credit card debt can increase a student's chances for dropping out of school, as they leave to find work to pay on their obligations. Research has shown that over seventy-five percent of university attendees carry obligations of over $2000.00.
Those attending universities are prime targets for creditors looking to extend financial lines at high interest rates. Introductory offers may sound appealing to students who do not posses the experience of managing financial matters. The temptations to buy now and pay later, is increasing college student credit card debts alongside of the individual's loans and tuition. Young adults who graduate with college student credit card debt and large loan bills are facing difficulties in getting their financial lives started, and many are beginning their first years of responsibility with poor financial history.
There are avenues that parents can take when facing college student credit card debt temptations. First, parents should teach their college bound high school children how to spend responsibly, explaining that buying now and paying later is spending future earnings, and paying a higher price with interest rates. Parents can also advise their teenage children to take financial classes and help them create a budget and review this budget monthly, making sure that the children are meeting expectations. The Internet offers a variety of financial courses and counselors who can advise parents and their children about financing and help students eliminate existing college student credit card debts. Before sending children to college where they may face temptations too great to refuse, parents should equip their children with financial skills, like budgeting. "Train up a child in the way he should go: and when he is old, he will not depart from it." (Proverbs 22:6)
Credit card debt advice varies, depending on the source, and both good and bad counsel can be found from many places, including money management books, Web sites, and even from loan companies themselves. Even well-meaning friends and family are probably willing to dole out this advice. Although some people believe in never using credit cards, following that advice is unwise. If a person ever wants to apply for a car loan, a mortgage, rent a car, and even apply for a job in some cases, he needs to have a financial history. If a borrower has never established a history, bankers and employers are left to assume the worst--that that person is a poor financial and employment risk.
Sensible credit card debt advice is to use credit cards wisely. This means paying off the entire balance before the due date each month. Doing so keeps the borrower from paying interest charges or late fees and increases his credit score. People who follow this advice live within their means and never fret about owing money. Unfortunately, for many people, this credit card debt advice comes too late. Many recent college graduates, for example, find that they have racked up considerable indebtedness. Whether they used their credit cards for legitimate living expenses or spring break trips to Cancun, they tend to think, "When I get a good job, I'll pay off my loans." Reality, however, often tells a different story. Post-college desires (such as a professional wardrobe, a new car, new home furnishings, etc.) tend to increase the overall indebtedness in spite of an increased income. People in these and similar situations need to focus on the big picture of slowly eliminating their loans while changing their spending habits. The first step is to look seriously at income vs. expenses, being very careful to separate needs from wants. After meeting the monthly obligations (rent, utilities, groceries, etc.), any leftover funds should go to pay down the loan with the lowest balance while paying just the minimum on the others. Then, when that first card's balance is paid off, move on to paying off the next card.
Some Christians suggest consolidating all loans onto either one credit card with a lower interest rate or into a consolidation loan from a bank or other lending service. This could be good, provided the debtor changes his spending habits and doesn't create still more credit card debt. Although the assumption that loans are a necessity in today's society could be disputed, the fact that God expects us to use our money wisely cannot. He tells us, "Do not lay up for yourselves treasures on earth... but lay up for yourselves treasures in heaven. For where your treasure is, there your heart will be also" (Matthew 6:19-21). Seek credit card debt advice that honors Him.