Debt has become a growing problem many college students find themselves in even before graduation. Credit card companies, along with other creditors, routinely target their products and services to college students.
This problem, however, is not remote. Today, far more college students are racking up debt than ever before. The primary reason is the education system, which in many cases does not provide sufficient or any resources for students to educate themselves on personal financial management.
Senior Ariana Simmons experienced credit problems early in her college career. "I was offered a pre-approved credit card even before I had a job. Credit card solicitors are very vague and don't point out the terms and conditions. It is unethical," she said.
With debt problems becoming one of America's greatest hardships, students are being bombarded on campuses nationwide by companies backed by MasterCard, Visa, American Express and Discover and are cashing in on the excessive, and many times exponential, interest rates they charge a month.
Only recently have colleges begun feeling the pressure from organizations such as the United States Public Interest Research Group, a consumer-advocacy organization pushing to limit aggressive credit card soliciting of college students. Ed Mierwinski, director of the group's consumer programs, said on-campus campaigns with gifts may be more dangerous to students' financial health than other approaches. There is a "tendency for impulse purchase of the card itself," he said.
A recent article by The New York Times writer Charles Delafuente noted campaigns that offer promotional items such as t-shirts and stress balls. Others create contests rewarding clubs with the most member sign ups, manipulating students into signing up for a credit card that they never initially desired or needed.
To protect oneself from the credit nightmare, Mierzwinski suggest that one should determine the need for a credit card. Next, read the fine print. On the back of every credit card application there are terms that bind the owner. Two other important things to note are the annual percentage rate, or APR, and annual fees.
Lastly, if one decides to sign up, be sure to be responsible. Although it is more than tempting to swipe, or more recently wave your card in front of a credit card reader, the ease of purchase does not translate into ease of payback. Try to only spend what can be paid off within that billing period. In turn, good credit history builds and will become a capital resource in the future.
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