Movie tickets? Swipe. Gas? Swipe. Jeans? Swipe.
Textbooks, dinner and tuition?
Swipe, Swipe, Swipe … that’s the sound of young people across America sliding deep into debt.
More than half the country’s college students have a least one credit card that is billed to them and a quarter of those have used their cards to pay tuition, according to an American Council on Education analysis of 2003-2004 federal data.
Fifty-five percent of students who used their cards to pay tuition carried a balance month to month.
College students’ large-sum swiping may be music to credit card executives’ ears, but bad credit can last a lifetime. Too many young people are learning that lesson the hard way – something must be done.
Credit card companies don’t bombard campuses because they want to help starving students pay for school. They target young people because they know young people make mistakes.
Often, it’s an easy sell. When shell-shocked freshman stream out of class this September – hungry, homesick and hung-over – credit card hawkers will be there to meet them. Or, more accurately, there to launch an all-out assault.
Hawkers use tricks, teasers and promises to attract young people. They advertise low introductory interest rates that spike later on. They badger stressed-out students. They offer “sage” financial advice. They stage plush toy give-a-ways and late night pizza parties – then shove “non-binding” application forms into students’ faces.
Want a slice? Just sign on the dotted line.
Marketing is marketing, but campus hawkers’ laid-back demeanor can be downright deceptive. Miss a payment and you’ll discover credit card companies aren’t playing around.
According to the ACE study, 48 percent of college cardholders carried a balance by their fourth or fifth year of school. A study based on data culled from 2002-2003 student loan applications reported that the average credit card debt owed by college students is about $2,700.
Many young people don’t understand (or ignore) how debilitating credit card debt can be. Strapped for cash, they swipe and run, confident they’ll be able to pay off their debt once they graduate and find a job.
But that’s risky. Student loans and installment plans are a safer bet – both charge significantly lower interest.
A number of colleges have imposed campus restrictions on credit card marketers. The harsher, the better.
Of course, it takes two to tango. Financially savvy, informed students generally don’t swipe, swipe, swipe their way into debt. So talk with your son or daughter about credit – later on they’ll thank you for it.
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