Newspaper article The Christian Science Monitor

Red Ink Stains Student Wallets Debt Levels Rise as Credit-Card Firms Target Colleges, Bringing Calls

Newspaper article The Christian Science Monitor

Red Ink Stains Student Wallets Debt Levels Rise as Credit-Card Firms Target Colleges, Bringing Calls

Article excerpt

With seven credit cards to her name, Meghan Coleman racked up a $15,000 debt. She was still in college.

"My plan was to get a job so I could pay it all off," she says of her time at Villanova University in Philadelphia. "But that didn't happen."

College is a time of transition into adult responsibilities, and using credit cards is one way young people are encouraged to demonstrate their maturity. But with as many as 1 in 5 credit-card holders in college carrying debts in excess of $10,000, observers worry that students are being lured into a spiral of spending beyond their means - and not having any clue about how dire the consequences can be. "It's easier for a student to get a major credit card than it is for a blue-collar worker," says Robert Manning, a sociology professor at Georgetown University. A recent study he authored for the Consumer Federation of America found that about 70 percent of undergraduates at four-year colleges have at least one credit card, and most had it by the end of their first year. The credit card industry, in Dr. Manning's view, is instilling dangerous attitudes toward credit and debt. "Kids are taking on the maximum credit and paying off the cards with minimum payments each month," he says. Interest on most student cards is between 18 and 23 percent. Free candy Companies entice with everything from free T-shirts and candy to discount air fares. "Students tell me that telemarketers start at 7 a.m. in the dorms," Manning says. For Ms. Coleman, it was the tables set up year-round with sign-ups and incentives that proved irresistible. "My friends and I would see these guys ... they'd be really flirting and alluring. We'd think: We'll get this card then cut it up. Then we'd decide we would only keep it for emergencies. But we would end up buying things ... or taking cash advances just to live on." The promotions are not aggressive, say credit card representatives, but simply offer a way for students to develop sound fiscal habits. "The fact is that the vast majority of young adults with credit cards manage to use them responsibly," says Patricia Boerger with the American Bankers Association (ABA). "They use their cards to establish a credit record, meet emergency needs, and manage their finances." About 59 percent of college students with credit cards pay their balance in full each month - a higher percentage than in the general population, according to ABA statistics. …

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