The credit card industry has made a profitable art of corralling consumers into ruinous interest rates and hidden penalties that keep even people who pay their bills permanently mired in debt. The companies are especially eager to target freshly minted college students, who are naïve in money matters and especially vulnerable to credit card offers that are too good to be true.
Colleges, which often allow solicitation on campus, need to do more to protect their students from taking on credit card debt that can severely damage their economic prospects once they graduate from school and join the world of work.
College students need to be told right off the bat about the dangers associated with the cards that the companies are going to throw at them once school starts. The students need to know, for example, that the penalties associated with delinquent debts will accrue to them ”” and not to their parents, as many students seem to think. They should also be told that delinquent debts can cause their interest rates to soar not just on their credit cards, but on car loans and mortgages as well.
[blockquote]Colleges, which often allow solicitation on campus, need to do more to protect their students from taking on credit card debt that can severely damage their economic prospects once they graduate from school and join the world of work.[/blockquote]
Yes, like giving them an education. Is someone really college [i]educated[/i] who can’t figure out on her own the consequences of using a credit card?
You’d be horrified, Laocoon, to know how many of my daughters’ friends have emerged from college with tens of thousands of dollars of credit card debt, which they then “pay off” by making only the minimum monthly payment, the worst thing they could do. Apparently none of them had parents who would tell them not to do this.
When I first went to college, I received a credit card – even though I had no visible means of support. Luckily, I had sense enough to know that someone would have to pay the bill and that I couldn’t afford to, so it was initially only used for real emergencies, then immediately paid. I still have the card, and it’s the only one I’ve ever used. But I’m still amazed that they would offer me one like that.
I would imagine that the New York Times was in the vanguard of undermining the principle of ‘in loco parentis’ 30 or 40 years ago. Once that principle was consigned to the trash heap, college and university rules to promote moral sexual behavior were abandoned, and students were given permission to pursue so-called sexual freedom without hindrance, leaving thousands of them with damage far greater than debt loads. Now the NYT wants colleges to “do more” to rescue students from credit card debt. Their concern is touching.
Some might want to take a “ha ha” attitude concerning credit cards and young adults, presuming that this generation consists of nothing more than snotty, over-indulged mini-clones of Parish Hilton and Lindsay Lohan. The fact is that credit cards are not only routinely given to college students; they are one of the prime marketing targets. One could not enter the student union at the university I worked at without being besieged by any number of young and attractive sales people hawking credit with “0 interest for the first 18 months” and “free gifts just for signing”. And while people might assume that most of these college kids are using their new found credit to buy big screen televisions and the latest stylish clothes, a good many, if not most, are using them to buy the textbook for a course that costs $250 or $300 because of the interactive computer disk it comes with, or to provide other necessities that their scholarships and grants, family contributions, and part time employment do not cover. And it seems so simple–“no interest for the first 6 months or year or 18 months”, “low minimum payments”, etc. The problem is that the high power, well designed, marketing ploys fail to mention that once interest is exacted, it usually begins at 18.6 % and may jump to as much as 21%. It does not even allow, much less encourage, the targeted students to think about it lest they come to realize that, with minimum monthly payments, they might end up spending more than $200 for every $100 purchase. Little wonder that so many young people end up graduating from college/graduate school with horrible credit and serious debt. One solution, it seems to me, is to require a “truth in advertising” clause for credit card companies that routinely recruit customers on college campuses and to provide at least a 72 hour cooling off period so that the applicant can think it over and hopefully talk it over with a parent. It would also be nice if more state attorneys general would begin to go after the banks and credit card companies that prey upon the young.
re: 1 [i]… like giving them an education. Is someone really college educated who can’t figure out on her own the consequences of using a credit card?[/i]
Come on. That is the point. They aren’t educated. They certainly are not “college educated.” They are 18 years old! And their parents are up to their own eye-balls in debt. I would agree they need to be educated, but they also need to be protected from predators.
AC
Katherine, I am horrified. I’m a college professor who is constantly frustrated by the way “education” is conceived as a narrow training for some job. I think real education and good scholarship ought to be motivated by agapic love for our students and communities. It troubles me when we send our “educated” graduates into the world trained to do some job but unable to manage their affairs; or unable to see how their studies in economics and mathematics have personal relevance; or ill-equipped to consider what a good and well-lived life looks like.
AnglicanCasuist, hopefully you can see that I agree with you. Education that leaves people defenseless–whether by failing to teach them what they need to know, by failing to give them good examples of well-lived lives, or by failing to inoculate them against the infectious worldview that insists that God, community, and tradition are irrelevant–is not good education. I am not mocking the students; I’m lamenting our failure, in academia, to care for our students.
I’m sorry Laocoon. I didn’t read your post carefully enough.
AC
No, I think the fault is mine – I tend to get a bit passionate about education, and I don’t think I wrote it carefully enough.
I am 29 and I remember well all the offers for credit cards at my campus. This really is a problem. I was fairly responsible in terms of money, but many other students didn’t have the discipline to deal with such offers.