This hangs over many college graduates. According to FinAid.com, the median cumulative debt for a four-year graduate was right at $20,000, with a quarter of them borrowing more than $30,000.

You’re heading into scary territory. At current average student loan interest rates, you’ll be paying about $315 each month in interest alone. And, depending on your loan, those rates may rise.

So how do you escape the horror of debt doom? The key is to quit living like a student. It’s too tempting to spend as much money as a student can borrow. Students live as if a loan were income.

No rational financial adviser would suggest that you create a spending plan that treated borrowing as income. Yet, that’s exactly how most college students budget. It’s as if they can pretend the loans don’t exist until they graduate and go to work in the “real world.”

Instead, you should live like you’ve already finished school but haven’t found a high paying job yet (a situation facing many recent graduates). Act as if you’re making only $20k a year — that’s $1,666 per month before taxes.

That means that you can’t afford to live in a one-bedroom apartment alone. Find a roommate. Professional clothing purchases should be put on hold until you have a high paying job. And, even then you need to shop sales, consignment and thrift stores.

Business meetings and any other expenses should be kept to a bare minimum — certainly until you’re able to score that big job and repay some debt. Any opportunity to reduce expenses should be taken.

The best thing that you can do is to keep the loan total from ballooning to $40,000. If you could keep the balance at $25,000, you would reduce your payments by a little over $100 per month.

The good news is that you have two years before you have to begin paying. So it’s not inevitable that you’ll owe $40,000. If you begin to adjust your spending now, your life will be much easier in a few years.

The alternative? Well, there’s always our friend, Vincent, and the organ fugue … Is that the sound of debt demons I hear cackling in the background???

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Now, what is different about the student credit cards?

You could say not much, since all credit cards work in pretty much the same way and are used for more or less same purposes. However there are 2 main differences with the student credit cards and these differences are on the 2 main aspects i.e. Credit limit and APR.

The credit limit for student credit cards is generally very low. This typically ranges from $500 to $1000 per month. Some people might argue the reason for such discrimination. Well, the reason is very clear and obvious. Most of the students applying for these credit cards have never used a credit card in their life so neither do they have a credit rating and nor the knowledge about credit cards. While the former is what the credit card suppliers look for before supplying the credit card, the latter is what the credit card holder would like to acquire. Both the purposes are met by keeping a lower credit limit. The credit card supplier reduces the risk that they are taking by issuing a credit card to someone who has never used one and has no credit rating. It

Technorati Tags: credit card fraud, credit card security, credit cards