Oh, how we remember that going off to college brought newfound freedoms. One of those new experiences for many students is their first foray into a world of credit and debt.

According to an Experian College Graduate Survey conducted in April 2016, 58% of soon-to-be-graduates said they had a credit card, while 30% said they had credit card debt with an average balance of $2,573. Another survey found that 63% made purchases without having funds to pay the bill.

Good news: The Credit CARD Act of 2009 restricts students under the age of 21. Your newbie student cannot open a card account without a co-signer. The law also eliminated direct promotional card offers on college campuses. These measures have helped reduce the number of cards issued to students, but, unfortunately, it has only made a small dent in keeping down the debt of graduating students.

It’s no secret that average student loan debt has been steadily growing. In 1993-94, about half of bachelor’s degree recipients graduated with debt averaging more than $10,000. In comparison, two-thirds of the Class of 2017 graduated with debt, and the average student loan debt was at $35,000 after graduation. This number more than tripled in two decades!

This is no coincidence. There is a direct correlation between higher student loan and higher credit card debt. As a new grad, you’re facing some tough financial decisions as you begin life in the real world. For instance, which debt do you pay off first?

Credit card interest rates are typically higher than student loan interest rates, which means this debt is more expensive. For example, a $10,000 student loan at a 6.8 percent APR paid over 20 years would cost $8,321 in interest. A $10,000 credit card balance at 17 percent APR paid over 20 years would cost $25,230 in interest, and that’s assuming both interest rates remain fixed over that payment period. The long-term interest cost goes up if the interest rate increases.

Bottom line: Student loans and credit cards can keep the new graduate in debt for many, many years. Moreover, it’s easy to get overwhelmed by these daunting figures if you are only capable of making minimum payments.

What is the teaching moment? Be extremely careful before incurring credit card debt. Look at your long-term financial goals. Decisions you make while you are in your twenties can set you up for financial success – instead of struggling with crushing debt for many years.

Need help making choices? The Debt Doctors at Quatrinini Rafferty can help. To receive the guidance you need for a brighter financial future, just schedule a free consultation today with either Attorney Matt Herron or Attorney Amy Buchanan at 877-332-8369.