Home » Personal Finance

How To Avoid Credit Card Debt While In College

3 August 2010 2 Comments

One of the biggest obstacles that college aged students face is credit card debt. It’s very easy to use a credit card to pay for just about everything while living the college lifestyle, but once the bills start coming in it can be difficult to keep everything paid on time. If you plan your budget well enough, it’s possible to live your entire college career on a cash only basis. Lean budgeting like this is often found in online MBA programs for good business habits. Many people think it’s difficult or downright impossible to live entirely on a cash budget, but with these tips and tricks, we’ll show you that anything is possible.

Cut Down – The first step to living an all cash lifestyle is to cut down on all of the unnecessary expenses in your budget. The more “fat” you can cut out of your budget, the easier and cheaper it’ll be for you to live each month. The biggest thing you can do to cut your expenses down is find a cheaper place to live. Living with friends can really help cut room costs, and the more friends you have, the more you can fit in a house to keep prices low. There are too many tips to cover on cutting costs, so you’ll have to check out our other guide on living a cheap lifestyle as a college student.

Money Orders – The only way to handle big payments without having a credit card is to get money orders. Most grocery stores have a Customer Service counter that will sell money orders for a small fee. You can expect to pay about 50 cents for a money order, which is a small price to pay for avoiding credit card debt. Some apartment complexes encourage the use of credit card payments so they can ensure that checks don’t bounce, but giving a money order is just as effective and convenient as a credit card payment.

Groceries and Gas – The other two big things that everyone buys each month are groceries and gasoline. Groceries can be easily paid for with cash and if you limit your junk food eating, you can eat healthily all month long without breaking the bank. The other big budget item that is often much easier to pay credit for is gasoline. Everyone has to drive their car around during the week, so gas is a necessary evil that must be purchased at least once or twice a week. At the start of every month it’s a good idea to withdraw $100 or $200 from your bank account to keep in your wallet. This side cash can be used to pay for things like gasoline that you may be tempted to pay for with a credit card since most places do in fact accept credit card payment.

The real struggle that many college kids face is avoiding buying unnecessary things. The freedom of having your own money to spend is a little overwhelming for some students and they end up spending too much money on credit cards and rack up unnecessary debt. The trick is to cut back on the extras and when you’re heading out to buy a new dress or shirt for a date, simply restrain yourself. Credit card debt accumulates from unnecessary spending rather than buying things you need. If you can refrain from buying too many accessories at the mall or going out with your friends, you’re going to be able to avoid credit card debt when you finally get out of school.



  • Justina Varron said:

    Thanks for a really interesting read, learn quite a few tips here, trying hard to improve my credit , i did a consumer proposal 7 years ago and just now i am starting to rebuild my credit slowly but surely and trying to avoid that credit card trap.

  • Andrei said:

    Agreed. A very simple idea but is hard for a lot of students. Buying unnecessary things is one of the few basics in order to survive. Nice article.
    -Andrei of Charlotte Sewer Cleaning