Student Credit Cards can be misleading and predatory; get the facts about student credit.
In such a plastic-happy world, everyone, it would seem, is seen as a potential consumer for companies wishing to market credit cards. This includes the thousands of students who head off to colleges around America each year. According to Consolidated Credit Counseling Services, Inc. (CCCS), which specializes in debt assistance services, 80 percent of colleges and universities permit some form of on-campus credit card solicitation, and nearly 80 percent of full-time undergraduates have credit cards.1 The fact that credit card companies are marketing to students is not surprising, since college students, equipped with a college degree, ultimately have higher earning potential and roughly three in four students hold on to the first credit card they receive for 15 years or longer.2 As companies lower the terms and restrictions for students as a group, getting a student credit card is often as easy as filling out an application.
Obtaining a credit card is clearly not an obstacle, considering the average number of credit cards per cardholder in America is eight. 3 However, research has revealed a disturbing trend. Credit card debt is mounting among college students. A report done by Nellie Mae showed that the average credit card debt among students rose from $1,879 to $2,748 between 1998 and 2000. 4 In addition, 10 percent of college students have rung up outstanding balances over $7, 000. 5
This brings us to the question—are student credit cards more harm than good? Certainly, credit cards are a day-to-day practical reality for the majority of college students. They can help tide one over during a temporary cash shortage, or while waiting for that next paycheck. They offer convenience when making higher-end or big purchases such as textbooks and apartment furnishings, and they are often a necessity when making an online hotel or flight reservation. More importantly, however, credit cards can act as a powerful tool in helping students manage their finances, and they are instrumental in building a credit history.
In short, having access to easy credit works in one’s favor only if managed responsibly. At the end of the day, the credit card debt has to be paid off. Since most students are net consumers rather than income-earners, the bills can pile up before one realizes it. To be sure, college life has many challenges—worrying about debt obligation shouldn’t have to be one of them.
1 http://www.usatoday.com/news/nation/2001-02-12-young-debt.htm
2http://www.msnbc.com/news/807617.asp
3 http://www.cardweb.com/cardlearn/faqs/2002/jun/6.amp
4http://www.cardweb.com/cardtrack/news/2001/february/16a.html
5http://www.usatoday.com/news/nation/2001-02-12-young-debt.htm
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