Some banks actively market high-rate credit cards to college students, often enticing them with gifts. Sometimes colleges themselves participate to recoup funds cut from shrinking budgets.

The result is the average undergraduate student is about $2,200 in debt. That figure jumps to $5,800 for graduate students.

By sticking to the minimum payments, it could take more than 12 years and $1,115 in interest to pay off a $1,000 bill on a card with an 18% annual rate. If students fall behind in payments, they get slammed with high late fees that drive the debt up faster.

Students are susceptible because, generally, they are short on funds. Some use their cards to buy books or pay for food. And they believe once they graduate, the card will be easy to pay off.

But the recent shortage of jobs for college graduates or lower-than-expected salaries coupled with high living expenses can mean students have trouble paying even the minimum and end up saddled with debt for decades. If they fail to repay the cards as required, they risk damage to their credit rating, which may prevent them from getting a job or buying a home.

How can parents help?
Just as they have the “birds and bees” conversation with their children, parents need to have the “credit card talk.” They should explain the difference in rates and how quickly high-rate cards snowball. Plus, students need to know how credit ratings work and why they’re important. And, of course, there’s budgeting. Few students are ever taught the “how-to’s“.

Since credit cards for the college kids have become the norm, many parents make sure their child gets the best deal. (And we’ll help too.). With their own card in their wallet, students are not as susceptible to people in the student center pushing cards with free goodies.