As students continue to take out loans to cover the cost of college tuition, their debt is mounting at an alarming rate. Credit card debt can be overwhelming, and that’s why Chicago  Treasurer Stephanie D. Neely decided to launch a seminar designed to help protect college students from credit and debit card fees and to teach vital money skills and debt management.

“College Credit,” was part of the “Save Chicago” series, a financial literacy program. The discussion took place Oct. 14 at the University Center of Chicago, 525 S. State St. It brought in nearly 50 people, including students who were eager to learn how to manage money and stay away from debt. The program is an ongoing effort promoting the benefits for all Chicagoans to budget and save.

Samantha Sangerman, a 21-year-old, theater major at Columbia, said she came to the seminar because she received an e-mail that said “minimize debt” and she was drawn to the idea.

Sangerman said she tries to pay the exact amount that she owes on credit cards.

“Obviously the number that I should pay back exceeds what I can pay back right now, so I’m trying to get back on track,” Sangerman said.

What some people aren’t aware of is that 82 percent of students carry balances and get hit with charges every month and 40 percent of the students, like Sangerman, say they charge items knowing they don’t have money to pay the bill,  according to statistics from the Office of the Treasurer.

Finance charges aren’t the only problem. The late fees added to credit card balances impact consumers as well. If any amount spent isn’t paid back within the first statement, banks will charge a late fee. Along with this, the overdraft fees on the debit cards can also add up. If an account doesn’t have money in it and a person is still using the debit card as a form of payment, they will get charged an overdraft fee.

Edward C. Sanchez, principal of Fresh Start Forms, a financial education firm, along with others, came to inform students of what they can do to limit fees and manage their money.

Approximately 45 percent of all banks and credit unions generate more money from overdraft fees than from profit, according to Sanchez.  In a business structure, the idea is to provide a product and receive profit for that product, Sanchez said.

“This event is focused specifically in providing tools and resources to college students that are clearly being bombarded with credit card solicitations,” Sanchez said. “We’re providing tools and resources to let them know there’s ways to manage and pay down your debt.”

One of his messages to students was to stop spending money. Sanchez said people spend too much money on items they don’t particularly need and then find themselves in debt.

“You want to spend cash to stimulate the economy, as opposed to using a credit card,” Sanchez said.

He gave an example of using a credit card to buy a TV. If the TV was purchased on a credit card, by the time the individual pays it off, he ends up paying considerably more depending on the individual’s annual percentage rate and the types of fees or charges the bank implements. The annual percentage rate can be calculated by the interest that the bank charges. For example, if the APR is 20 percent a year, and the total amount spent on the credit card isn’t paid, the interest is then divided by 12—number of months in a year—and that figure is added to the balance. If the consumer bought the TV with cash, there wouldn’t be any other fees to pay.

To keep students and young adults from making financial mistakes, the government created the Credit Card Accountability Responsibility and Disclosure Act of 2009. This act puts a limit on who can get a credit card. For example, anyone under the age of 21 cannot get a credit card unless they have a co-signer,  which is expected to keep many people out of debt.

“Parents should start teaching their children early about the choices children can make with money,” Neeley said. “That’s a message that needs to be re-inforced through every stage of life.”