Credit Card Debt Among College Students
 

I subscribe to a couple of e-newsletters and the topic in one of them was about credit card debt. This made me think of a story I saw last week on either Dateline NBC or 20/20 Downtown. The reporter interviewed several college students and those who have graduated.

The students spoke of the incredible debt they gained from receiving credit cards while in college. One gentleman said he had to forgo graduate school because he could not afford it due to the amount he owed.

Then, the reporter uncovered a dirty little secret. Some colleges actually are paid thousands and thousands of dollars by the credit card companies to come on campus and solicit credit card applications to the students. They also sell students names and phone numbers so the companies can solicit by telephone (I always wondered how they knew my name and phone number in my residence hall).

One school in Tennesse refused to be interviewed, while some state lawmakers are finding ways to ban this practice. They say that students without an acceptable source or of income or no incmome at all should not be constantly tempted to apply for credit.

Of course, the credit card companies continue to say that most college students know how to manage the use of credit wisely. However, there is still a somewhat high rate of students who are unable to handle the privilege.

I remember lots of representatives on my campus were always set up in the student center. They gave away t-shirts, cups, pens, etc. to attract students.

Since we have so many college students and recent grads on this board, I was just wondering what everyone thought about this.

I'm sorry for the long post.

As someone who has weathered the storms of having too much credit in college, and as someone who understands marketing principles, I have to say that the best approach is for students to be educated about credit BEFORE stepping foot on campus. Colleges and universities are not going to stop accepting money from companies who give big bucks in exchange for having access (exclusive access in the case of soft drink makers) to college students (who are mostly over the age of 18, btw). So, parents, mentors, and concerned orgs. (hmmm, a chapter program, perhaps?) need to give kids financial info long before they hit Poduct U.

I would suggest that parents include their children in the family budget planning process, and that kids be given and/or earn money that they must budget and account for. Or, money management/debt counseling seminars and courses should be developed by interested orgs. for pre-teens and teens.

Even though I myself made BIG, HUGE, LARGE mistakes with money and credit as a young adult, I don't think anyone tricked me into assuming the debt; I was just stupid about it. Plenty of my friends were too, but plenty were not. I think older adults need to constantly counsel young kids, teens, and young adults about the value of money, the concept of debt, and the reality of INTEREST! I have done this with my younger sister, who is now a senior in college. After seeing her two older sisters make fools and paupers of themselves, she has been much more responsible with her own money and credit history.

DG

I can certainly relate to credit card debt. I am in my third year cf college and I am already over $3,000 in debt! All accumulated during my FRESHMAN year. These credit cards wont admit it, but they target young students who are not up to being responsible for their expenses. In NYC they even give away candy and gifts to people who will sign up for them. Isn't that ridiculous!!? In the end though you have to be responsible for your actions.... you have to pay them. It is just a shame that they are (I was) lured into them.

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In complete darkness we are all the same... It is only our knowledge and wisdom that separates us... Don't let your eyes deceive you

The Diva Truth

A couple years ago there was an article in the local paper about how outrageous credit card debt is among college students. The article reported that my alama mater no longer allows credit card companies to solicit on campus. The companies were paying organizations to get people to fill out their applications, a commission kind of thing for whatever number they could process and approve. I was pleased to see this was stopped.
I got my first major credit card my sophomore year (spring '88) and used it wisely for about a year. To make a long story short, it's only been paid off about two years.

PearlsnIvy,

I'm glad to hear that one college has but a stop to it. I don't think any school should sell their students' private information to companies just to line their own pockets with some more green.

My freshman year I racked up over $10,000 in credit card debt (hello spring break). Because of it my credit was trashed and I had to leave school for over a year in order to pay the cards off...
It was horrible, but I was ultimately responsible for my mistake. The credit card companies are doing what credit card companies do (and any company for that matter), making money. It is a shame that college students are targeted, however, blaming the credit card companies isn't right... we alone are responsible for our decisions in life. Visa didnt force me to buy tickets on a cruise, and MasterCard didnt force me to purchase a new wardrobe everytime the weather changed; I made that choice and had to live with it.
I think that, not only colleges, but parents/gaurdians should educate those new to college about credit, debt, and personal responsibility. Perhaps a session in orientation could be devoted to the cause.. "Personal Finance"
What do yall think?

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Faced with the Divine, I was asked; "What one gift do you seek?"
I answered ever so meekly; "I seek Honor, Truth, Integrity, and Wisdom, yet those are four. How am I to choose?"
The answer came as a pounding whisper; "The four you seek are but one. I grant thee Compassion; for without it the four make none."
Author - me

I know this is an OOOOOOLLLLLLDDDD topic but my boyfriend and i were just discussing this a couple of days ago. i requested a copy of my credit report and was astonished by the info it contained. i mean it had all my business on it. the good thing about it was that i had only been late with a payment once http://www.greekchat.com/forums/ubb/smile.gif but my question is how can college students alleviate the debt they may have accumulated in a timely manner?

Does anyone have any success stories? i am thinking about living at home for awhile instead of getting another apartment after I graduate. so i can take care of some of these student loans


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The truly educated never graduate!

Just a note: you need to request a credit report from all three credit agencies because they are independent of each other and the credit reports could all be slightly different. For those who may not know, the three agencies are: Equifax, TransUnion, and Experian. You should try and request a credit report from each once a year.

Speaking from the trouble that I have found myself in with my credit cards, I think this should really be looked into legislatively.

I know that you must be eighteen to get a credit card and what not, but realisticly, when I got my first four credit cards, I was FRESH out of high school and was broke. I didn't have my mother right next to me to give me this and that and I was BROKE.

I was irresponsible, and I don't want to make any excuses for myself, but I think that it should not have been that easy for me to get four credit cards just like that.

And they know exactly what they are doing. They don't charge us any annual fees or processing fees and they set up these little pretty booths with t-shirts and cups and stuff. All you have to do is fill out a little form and prove your a college student and it's on. Then you get cards in the mail you didn't even ask for, and all kinds of stuff.

My credit is really not anywere near good right know, and I have cancelled my cards, which really makes themm not like you then, but I really wished that there could have been some kind of warning and it wasn't that easy.

But Like I said I was 18 and I though I was grown...lol. So I guess I deserved it.

But for a credit card company to set out and give credit cards to people when the blatantly state they have no job is really just to show how far they will go.

They let college students do that, because they know we have a long way to go in life and eventually they will get their money because we will want to buy houses and cars and what not. I jusdt think it is kind of wrong though that the schools allow this to happen

Great topic, SisterFriends!

Fortunately, my mom curtailed my credit card tendencies. I only had one card w/ a $500 limit; I was threatened with paying all my own expenses if I signed up for more cards. I was one of the lucky ones.

It is also interesting that someone mentioned college students and cars. My cousin was given a guaranteed car loan while in college with NO cosigner (and very little credit) simply based on her freshman year grades! Now what work/study-job-having college student needs a car note? Needless to say, her parents are still her main source of income today. Did I mention she graduated from college in 1990?


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MCCOYRED

Dynamic
Salient
Temperate

Mu Psi '86
BaltCo Alumnae

Well, my story is different. I did not have credit cards while in college. Mind you, I had a CLEAN, POLISHED credit history....NO CREDIT, BUT, someone did obtain a card IN MY NAME! http://www.greekchat.com/forums/ubb/eek.gif

I NEVER received ANY bills. I guess my SS# was obtained from a class roll, or some department and my identity was "stolen".

Anyway, one day, my mother called me and told me something about a card and the "bill" was being turned over to a collection agency. She KNEW I never came home with NEW items. Anything NEW I had, she had purchased them. Then the records showed that items had been purchased as far away as Chicago...HECK, I have NEVER been to Chicago! http://www.greekchat.com/forums/ubb/eek.gif

So, from there we tried to get to the bottom of it. By the time we found out what had happened, it was too late. The incident went on my credit report. I submitted a dispute and left it at that. The debt the person had incurred was over $1000. http://www.greekchat.com/forums/ubb/eek.gif So, that was in 92. Since then, I have little by little gotten my credit, back on track!

I HAVE NOT AND WILL NOT PAY FOR SOMETHING I DID NOT DO! Shoot, at least let me have some merchandise or something...YA KNOW!

I wish they would curtail or limit credit to college students.

Like you AKA2D '91, I have now and had throughout college outstanding credit history but I have had a couple of fraudulent accounts set up in my name and showing up on my credit reports probably for the same reasons you stated (i.e. people stealing SS# from class rolls, etc). I feel like I am an expert on this situation by now. Like I stated earlier, people, you must obtain a credit report from each of the three credit agencies once a year because the longer incorrect info is on your reports, the harder it is to dispute. Not only should you dispute it with the three credit agencies but obtain a fraud affidavit from the company that has a fraudulent account with your name. You can also put fraud alerts on your credit reports but you have to do this with all three agencies because as I stated earlier, they are independent of each other. Each credit agency will explain how their fraud alerts work. But anyway, thank God that I have been able to get these fraudulent accounts off of my credit reports.



[This message has been edited by DST Love (edited January 17, 2001).]

I have had to deal with the nasty credit demon as well. I come from a large family. I am the third child out of 10. We just did not have much. When I went to college, I could not believe that someone would give me not one but two credit cards. Can you imagine how it feels to go from having nothing to having a whole lot of somethings. Well, I had no discipline whatsoever. I bought clothes, things for my family etc...Even though it has been years since graduation, I am still battling with this demon. If anyone has any suggestions on credit repair, please advise.

There was an article about a girl suing the company that gave her credit cards. They knew that she was a freshman with no job. It messed her entire life up. She could not even get an apartment. Anyway, she won the law suit. I feel that maybe colleges should offer a class to all incoming freshmans regarding this situation.

Peace

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You are the master of your own destiny!

My name is OneSavvyDiva...and I admit...I too, am a credit-card victim! Sike, anyway, I also received a credit card my freshman year in college. Like one of the other sisterfriends said, I never received financial advice/example from my parents, and I maxed up my card within 3 months. I already had a car payment, cell phone, phone bill, and such...needless to say, I did horrible in school because I had to work so much to pay my bills. I ended up losing my scholarships, and grants, and I had to sit out of school because I couldn't pay my bills, let alone tuition! ANyway, my car is paid for now...I have gotten rid of the UNNECESSARY things I though I so desparately needed(except my cell), but I am still struggling with that credit card bill.

If anyone DOES have any suggestions on how to restore damaged credit, please let a sista know!!! I am SO glad I am going back to school this semester, I feel like I am a freshman again, new start! I just hope I can pull that GPA up...that's my first and FOREMOST priority right now.

I too am a victim of getting a credit card and being in some serious debt. Luckily, I have my mommy helping me out, but I'm still in debt. People will say that the person is to blame, but unfortunately for some people, credit cards are the only way they can pay for their college expenses. At my school we have a fundraiser that raises money for cancer, well how about a credit card company that basically lives on my campus decided that they would donate money to the cause every time a student opened a new account. The tactics that they use to get revenue is ridiculous.

My sophomore year I worked as a telemarketer at the company in which I had an account with. I worked there for a month and had to quit because of their practices. They thrive on student accounts. That's how they make their biggest and EASIEST sales. They get the students list from the school because they make a contract with the school in which they will make a "school credit card" and sell it to the students. When the students make purchases, the school gets a portion of the sales. I learned from working there that the companies make their money off of the outstanding debt. They had a board which contained the total of the company's outstanding debt from its customers and they would give prizes to it's employees if it reach a certain mark by the end of each quarter.

College students leave college with huge amounts of debt. It's hard for them to get a car, an apt, etc. Nowadays, companies are even looking in people's credit file and will turn them down for employment because of bad credit. With all this debt and the problems that follow, they can't begin their next phase of life.

After evaluating the whole situation, I believe that it should be a law restricting when a minor should get a credit card. The age limit should be 21. I don't understand how the government can say, one cannot drink until you are 21, but at 18 you are an adult and are responsible enough to handle "free money". The government is quick to limit how much financial aid you receive and has a fit when someone cannot repay the loans on time. If they thought about things better, they would know that it would be easier to pay off the loans if college grads didn't have to pay off their credit debt first.

well i only have one card but i only use it on school related issues (ie if some of my financial aid mysteriuosly comes up missing, ya'll know how it is) and for books. my thing is these darn loans. i mean i dont have a billion dollars worth of them, but its enough that i don't think i'll be getting that new grand prix wide track for a while http://www.greekchat.com/forums/ubb/smile.gif

DSTLOVE: good look on those other two agencies. if anyone is interested the number for TransUnion is 800-632-1765. I rec'vd my report in about a week.


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The truly educated never graduate!

[This message has been edited by meeks (edited January 17, 2001).]

I still say that even 18-year-olds are old enough to understand the consequences of their actions, and no one is a "victim" of these companies. Their own bad judgement, perhaps, but you can't fault companies for doing what they are designed to do: make money by marketing their product to those who want it. Why are we always saying to the government/big business-"save us from ourselves"? Whatever happened to teaching personal responsibility, buyer beware and all that? What if they said fine, no one under 25 can buy a car, get a credit card or what-have-you? Then folks would be crying about their "freedom" being taken from them. We can't have it both ways.

That said, I STILL think older adults should be counseling their young adults around them so that they understand the far-reaching implications of credit, interest and the like.

As for student loans, I would be much happier seeing some young person into the federal government @ 8% interest for a serious INVESTMENT in their future than them being silly enough to be in debt to Visa/Mastercard, etc. because they purchased things that LOST VALUE the minute they purchased them (cars, clothes, etc.).

As I stated a few months ago (see above), my opinions have been formed from HAVING BEEN THERE and DONE THAT. Thankfully, I have a younger sister who heeded my cautionary tales and is on her way to a great job, with signing bonus, some savings and very little credit debt-straight out of college.

DST Love has made a good point by expressing how important it is to get a credit report from all three agencies. My sister taught me the importance of that a few years ago.

My sister and another woman shared the same name before she got married. The other woman's bill collectors were calling my sister. She hadn't used her maiden name in more than 10 years and didn't have any bills before she got married. The only link is that they had the same first and last names, and both lived in our hometown.

After threats from my sister, they got it straightend out...promptly. The charges never showed up on her credit reports, but she still checks them at least once a year. After that, I do the same.

Don't be afraid to question discrepancies!

The rise and fall and rise of my credit (TTT)
 

Well, my credit began in November 1991 as a college freshman with my very first credit card issued by Sovran Bank (and after it being transferred and sold no less than five times since then and now under Citi Cards) which I still have today at a reduced rate of 12%--I plan to ask for another rate reduction in about a year from now.

During my college years I acquired four more credit cards (Citibank, Capital One, The GM Card, and the GE Card) and two department store cards--Marshall Field's, and MayCompany/Kaufmann's, and believe it or not, I did VERY well handling them all, sometimes amassing a little too much debt at times, but always made a payment and/or paid off and closed the account.

The dept. store cards I used rarely (MF I last used in '96 and made a very small purchase, and Kaufmann's was never used even once). and two of the other cards were paid off and closed out by me in 1996.

The debt problems began June 22, 1996 when I stupidly used my GM Card to make a cash advance to purchase a junky 1985 Honda Civic from a private owner ($1,200). I later traded it in for another Civic three weeks later. Seven months after that I HAD to buy an even newer Civic and put the $800 down payment on the GM Card. I also had began to max out my GE card (which thankfully only had a $300 limit compared to the $7,000 limit on the GM Card).

Oh, and I eloped with someone in August '97 so we purchased our rings on an Andrew's Jewelers card ($2,000). By the spring of 1998 I had maxed out all my cards, the Civic was repoed, the rings were returned in exchange for the debt being cancelled, and I filed for bankruptcy amassing $37,850 in debt. Oh, and I amassed $800 in cell phone bills (remember this was '97 and roaming charges for an out-of-town traveler like me were the norm).

Why did I do all this? Because I wanted to live the yuppie lifestyle SO badly. I had a job that gave me that persona. I drank lattes, drove a late model Honda, had a cell phone and a laptop, wore suits and ties everywhere, and I felt compelled to keep that yuppie image any way possible.

The bankruptcy alleviated all but student loan debt (of course). For about a year and a half I was a cash-only person. I got my updated original credit card in the mail in Nov. '99 (I had paid off and forgotten about that card YEARS ago, having only used it once or twice).

I financed two cars at a buy-here, pay-here dealership and paid them off promptly and that helped my credit some. I got a house financed two years after the bankruptcy which helped my credit some more. But I was unemployed for 5 months in 2001 and I ran out of $$ and I was reported 30 days late on my credit for two months in '01. I did begin a job at about that time and worked a payment plan w/the mortgagor to pay the back mortgage due, which I did promptly.

My credit card had almost reached its limit in the spring of 2003 ($2,100) when I got my tax refund ($3,000) and I paid off the balance.

Also, b/t 1998 and 2001, I paid off two student loans

Anyhow, to make a long story short, despite my shaky credit, I managed to refinance my house at a 5% rate, purchase a '98 Civic at a 6% rate, consolidate all my student loans at a 4% rate, get the late mortgage payments off my credit report and incorrect late student loan payments off my credit report.

My credit is now at its BEST standing in 6 years (PRAISE GOD!!!) The negative credit items will be removed b/t December and March of 2005 b/c of the 7 year limit.

Oh, and my credit card only has a balance of $80 as of now. :)

Moral to this post: When it comes to credit card purchases, know when to say when.

NOt to single you out but....
 

I am NOT attacking you personally...but I despise the notion that something "legislative" has to be done to correct our own lack of self control!:mad: This is a capitalist society...and while I don't agree with how credit card companies are going about it....they're trying to make $$ so more power to them! Its the PARENTS responsibility to educate their children about credit....and it is also the Young adult's responsibility to be educated in the area of credit. If you're old enough to drive and go to war for our country when you go off to college....you are old enough to deal with the consequences of being irresponsible with credit.....no one said life was fair...
...........Again I'm not talking to you personally

My Sorors would hold financial workshops, credit card education seminars at the beginning of each year....I'd say its a good way to learn responsibility..even if it does take years and years to pay off the debt...

Update:

My credit is back on track. I only have 1 card that is active. My other cards are inactive because I've paid those bills off. :cool:

I've placed statements on my credit report where companies are to contact me (in writing or via phone) that a line of credit is being requested. Hopefully, reduce or eliminate the chances that my identity is stolen again.

Re: NOt to single you out but....
 

This sounds good in theory, but not every student comes from a family that is good with credit, nor was ever educated themselves. Therefore, the parent may not be the most reliable source for information. There are hardly many students that sit down to learn about credit until it is too late. As a broke college student, the FREE school supplies, t-shirts, and false sense of "free money" is VERY appealing. It is true that people need to own up to their mistakes, but by the time it really becomes an issue, mounds and mounds of damage is done.

Credit education should be given in high school. I think that it should be conjoined with the required Free Enterprise class. That way students can learn before they are sent into college. School is the best (and sometimes only) place that some people will learn about certain subjects and I think that this is one that DEFINITELY needs to be addressed.

On another note:

I am in the process of rebuilding my credit and I'm so excited! I am alos taking steps to purchase my first home! Yippee!

At my school, credit card vendors are not allowed on campus, so
I guess I have been sheltered form this problem.
Before I left for Bennett, my parents told me time and time again to not get a credit card- they'd prefer that I just ask them. SO with BC being credit card free, the only other place you can get them would be at the stores (malls). I do know of a few people who have them, but they only charge between 25-50 dollars a month and pay them off.

Question: Does having a bank overdraft fee mess up your credit?
Also,what are interest fees?

Re: Re: NOt to single you out but....
 

So true!!

My boyfriend's mother was never good with credit or finances and in turn, never taught him how to manage his money. Right now, she does not have a checking account and often throws bills away without paying them. On the other hand, my mother taught us to be financially responsible early on. I can see the differences between the two of us now. He didn't open a bank account until he was about to come to college while I already had $2,000 invested in a CD. My boyfriend was lucky in that he had the initiative to teach himself about managing money and credit before he needed to know these things.

Being at an HBCU, I see situations like this all of the time. Many students here are the first in their families to attend college and come from low income neighborhoods. I have classmates who have ten credit cards. There is no need for any college students to have that many cards.

Some of you have mentioned that you wish they would limit the amount of credit that is given to college students. I understand where you're coming from, but it's important to remember that not everyone goes to college. A 20 yr. old junior in college may not need that credit card to buy herself a hot new outfit or a stereo- but there's lots of 20 year olds out there married with babies who use credit to buy themselves a washer and a dryer, you know? I started thinking about this when I moved into an apartment. I got a Sears card because it had low interest and I purchased a TV. However, they gave me an UNGODLY amount of credit- my momma was like, "Uh, what in the world would you be buying at Sears at your age that costs that much?"

I think there should be more education about credit, though. I am no stranger to debt, but at least I knew what I was getting myself into. Many people come to school and sign up for those free Tshirts and don't know what they are doing!

Regardless of what anyone thinks, there are 18 and 20 year olds who can manage large amounts of credit. Some of them are able to use it to their advantage and come out on top of the credit game. Sure, there are thousands who don't do that, but it teaches them a lesson as well.

I personally got credit cards in college and used them at hard points in my life for straight survival. It was to the point where if I didn't have a credit card, I wouldn't have been able to put gas in the car to get to work to make more money. So, I needed it. I only have one card now because I paid off the others. However, I think that my experience with credit taught me how to use it more than any lesson from my parents or class, of which I had both.

Yes, there are some people like yourself that has used credit wisely. I can and never will knock credit cards completely. However, it is more likely than not that some students that enter college don't know anything about credit. Sure, you learned mostly from experience, but you alos had a background in which you were taught by your parents and a class. Most people do not have that. I am sure that some of the information that you learned from home, school, or wherever about credit helped to shape some of the decisions that you made with your cards once you obtained them.

Credit is definitely a good thing once you get it and use it wisely. But we do need to acknowledge that a lot of people don't have some of the same life experiences. Some people do get the cards to help with gas (as you said), buying books and supplies, food, etc. But then there is always the problem of paying them back. Some people work the system, whiel others spend years working to pay the system back. It's hit or miss.

I know at my school there was a lot of attention focused during orientation towards proper use of cards, when to sign up for cards and when not to, etc. They basically showed the horror stories and left it at that. I only got one card in school and used it on a "as needed" basis.

It seems like sometimes there are mixed messages; schools bring people in to lecture on the evils of credit card use, but then allow companies to come on campus to sign students up.

moderators please post elesewhere if this isn't appropriate here. Thanks.
 

This is a little off the subject but still vital info. about credit cards and debt.

It was bound to happen. People are using their camera phones to take photo's of unsuspecting shoppers credit cards while at the register. Then they use the credit card info. at their will and the persons credit is run up. The things criminals/hustlers won't think off. So be careful using your cards.