Smiling credit card lenders stand ready to welcome and lend a helping hand to freshmen entering colleges this fall.
Their pitch is as smooth as their offers are ubiquitous. Visa captures the spirit in this advertisement: "Free from parental control at last. Now all you need is money. Cha-ching."
The thumb-your-nose message is typical of ad campaigns that appear on college campuses, says Robert D. Manning, a professor at Georgetown University. Students are conditioned to think that credit cards are cool, a social norm of college, and that they are a great way to hide from parental view purchases for such things as tattoos, body piercing and spur-of-the-moment trips to Europe.
"Most parents are unaware of how frequent their children circumvent their financial control by using surreptitiously obtained credit cards," says Mr. Manning, a sociologist who recently completed a five-year, in-depth study on credit card use at colleges. "One of the major findings [of the study] concerns the explicit marketing of credit cards to students in order to challenge parent authority relations."
He cites an example of a student who wrestled with the decision of whether to enrage his parents by asking them to pay for a trip to Europe, or risk "social death" by not joining his peers on the trip. The solution? He used his credit card to pay for the $5,000 jaunt to London, and even charged the cost of his passport fee. Two years later, his parents still know nothing about it, Mr. Manning says.
Mr. Manning became interested in the widespread growth of credit card use on college campuses about 10 years ago, when he noticed the increased pace of industry marketing efforts at Georgetown. His study is based on 300 interviews and 400 responses to a questionnaire from students at Georgetown, American University and the University of Maryland.
"Shockingly, the study shows that it is easier for unemployed college students to receive major credit cards than low- and moderate-income workers," Mr. Manning says. Students are encouraged to use credit cards to satisfy their immediate wants and needs, even when they have no means of paying back the inevitable debt.
The credit card offers show up in mailboxes, bookstores, classrooms and cafeterias. A minority of students ignore the offers. Mr. Manning's study finds that by the end of the first year of college, 81 percent of undergraduates have at least one credit card. The average debt college students carry on their cards is $2,000.
But one-fifth of the students surveyed had debts of more than $10,000, a threshold that forces many to drop out of school and go to work to pay off the cards. Mr. Manning meets many financially troubled students in his credit card workshops.
Here students learn the meaning of interest rates, finance charges and revolving debt. After observing so many students get in trouble with easy credit, Mr. Manning believes that credit card companies should not issue cards to students under 21 without the consent of their parents. …