Undergraduates whose parents argue about money are twice as likely to own several credit cards than those who say their parents do not argue about their finances. Perhaps unsurprisingly, those with more cards are also likely to be in more debt.

In their study of over 400 students, Adam Hancock and colleagues from the East Carolina University also found that female students were more than twice as likely to own two or more credit cards than their male counterparts. The study was recently published in the Journal of Family and Economic Issue.

The study follows another piece of research, conducted by the Money Advice Service, an independent service set up by the UK government, which found that first year students expect to graduate with debts of more than £39,000 ($63,000). What is more, of almost 1,500 students surveyed, more than one in ten of them have credit cards.

With the cost of fees increasing in the UK, it’s clear that the issue is going to get even bigger. Many students see credit cards as a low commitment way to get their hands on easy cash. But what can start off as a card ‘just for emergencies’ can end up hitting your wallet harder than expected. Plus, that available credit can fuel the temptation to spend beyond your budget. In actual fact, credit cards are often not the smartest option, especially as a student when you may be eligible for interest-free or low-interest bank loans (see the table below).

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Of course, used in the right way, credit cards might well be a neccessity, getting you through your student days and making sure you can pay for essentials that crop up, like unexpected field trips or conferences which could really be worth the money.

We asked Jane Symonds of the Money Advice Service for her tips on how to make the most of your options, whilst avoiding the biggest pitfalls of credit card debt. If your parents are the type to argue about their finances, following these tips might just help you break the cycle! Continue reading →