Are Student Card Deals Actually Used to Pay for College?

United College Marketing  Services study reveals student credit lines have almost reached the limit of $6,000 and the usage of cards has tripled since 2001. As youngsters of 18 years old in most of the American states are eligible to make card deals without having a job and getting parental consent or cosignatory, it would be natural to see mass borrowing for college-related expenses.

While the consequences of borrowing are already seen - unwise card use, fat balances and damaged scores upon graduation - its purpose surprises.

Only very few young people resort to plastic to fund their studies, basically paying with it for clothes or unexpected/emergency purchases. The study shows college has other sources of financing, such as Federal Student Loans, private education loan and others.

Parents willing to provide for their children's educated and so better-off future also use borrowing and, again, credit deals occupy far not the first place. Parents' basic sources are Federal PLUS Loans, Private Education Loan and Parent Home Equity Line of Credit. Retirement account loans are used even rarer than plastic.

Back to college students, what do they use their so generous credit lines for? Even the $3,000 limit offered by Capital One for young adults would be enough to cover the average tuition-only fees per academic semester. Despite that student bank products account only for a very small percentage of college borrowing, only about 8% on the part of students.

Others apply for student cards to pay for entertainment, like movies, restaurants, clubs and various youth items, and earning point rewards on them. One of the most generous offers in this respects is recognized to be Citi® mtvU^TM Platinum Select® Visa® Card for College Students which rewards students with 5 ThankYou points for every dollar spent on purchases at restaurants, record stores, movies and video rental stores. Its redemption opportunities are even more exiting. Gift cards, MTV events and airline tickets promise young adults a great spending experience and encourage them to use plastics for every small item every new day.

Analyzing the results of the survey, we've come up with a curious conclusion. Those students, who do finance their college expenses with plastics, no matter if they are a student or consumer type, tend to resort to plastic in exceptional cases of low or no cash flow. They rarely pull it out of their wallet and keep it mainly for emergencies.

The other category of students is literally living on credit and graduates with a gross debt made on something other than textbooks, room and board and other living expenses associated with attending college. Interesting is that both the groups have after-college debts that worsen their eligibility for new and more important loans - car loans and mortgages.

It would make you think that while student cards could give an easy and fast access to solid funds and great benefits such as favorable interest rates and no fees, they are not perhaps the best deal to borrow at such a young age. Or, if they are, there should be some basic education on how to benefit, not lose, on student card application.