Charging
Students deal with credit
By LIBERTY CASE
UNIVERSITY JOURNAL
The spending season is here and students are swiping
credit cards and making purchases like never before.
Michele Johnson, CEO of Consumer Credit Counseling of
Nevada, said students often turn to credit cards to make
holiday purchases and find themselves with credit problems
later on.
Credit research studies at Georgetown University revealed
that four of every five college students have at least
one credit card. Approximately 32 percent of college students
have four or more credit cards and carry an average balance
of $2,748, Johnson said.
Johnson, who heads the non-profit organization that offers
free financial education, individual one-on-one counseling,
and a debt free payment program, has seen an increase
in clients who are college students and find themselves
strapped with unwanted financial problems.
“We see college kids on a regular basis. . .and
it is becoming more so unfortunately,” Johnson said.
“Credit cards are the primary source of financial
obligation.”
LaRee Anderson, a senior psychology major from Centerville,
thinks college students are targeted by credit card companies.
She said she is bombarded with mail, e-mail and phone
calls from companies offering her credit cards.
“I don’t use a credit card because I can’t
afford to,” Anderson said. “I have had roommates
in the past who have had problems with them.”
Gerri Detweiler, and education Adviser for Debt Counselors
of America, said it is becoming increasingly easy for
college students to obtain credit cards.
“As long as you’re a full-time student, you
can get a card,” Detweiler said. “Why is it
so easy? Because credit card issuers realize that parents
can be counted on to bail out students who run up oversize
balances or fall behind in payments.”
Johnson said credit card companies often promote on campuses,
making it even easier for students to obtain cards.
“(Credit card companies) make it very attractive
. . .it seems so easy,” she said.
Some SUUans use credit cards because of ease and convenience,
but may be unaware of risks associated with charging expenses.
Students who do not pay off the entire monthly balance
can easily end up paying large amounts in interest and
fees.
“Carrying balances on credit cards can be quite
costly,
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Four of every five college students have at least
one credit card, and approximately 32 percent of college
students have one or more credit cards and carry an
average balance of $2,748. Credit card companies often
have promotions on campus, making it easier to get
a credit card.
ERIN MADSON / UNIVERSITY JOURNAL
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especially if the student can make no more than the minimum
payment each month,” Deitweiler said in an interview
last year.
A student who sticks to paying minimum payments could expect
to take more than 12 years and $11,150 in interest to pay
off a $1,000 bill on a credit card with and 18 percent annual
rate.
“If a lender gives you cards with $1,000 or $2,000
limits, that doesn’t mean you can afford to carry
a $1,000 or $2,000 balance,” Deitweiler added.
Johnson said there is an influx of clients seeking financial
guidance during the first quarter of the year.
“The first of the year is our busiest time because
the bills start to funnel in . . .and (clients) realize
how much they have spent (during the holiday season),”
Johnson said.
Johnson recommends that before making a credit card purchase
to calculate what a student can afford to spend.
“If you do charge – don’t charge more
that you can pay off at the end of the month,” she
said.
When cards are used well, they can help a student gain a
respectable credit history, Detweiler said.
Diane Carroll, a senior psychology major from Gilbert, Ariz.
said she took a personal finance class on campus and it
helped to realize that credit cards can be helpful.
“It’s my fear of debt and watching others exceed
their limit that has kept me safely in the real of no credit
card use,” Carroll said. |
