College Debt
College Students and Credit Card Debt
Debt has become a real issue in this economy and credit cards play a major role in assisting the problem. Adults are barely responsible enough to budget their expenses and credit card companies are now prying on college students. Just coming out of high school a 17-18 year old does not have the mind capacity to understand finances and the importance of a good credit history. The credit card companies bombard students with enticing offers of credit limits; cash back reward options, and no annual fees. They however, omit the high interest rates and penalties for not paying the balance off in full or for having late payments. The companies also fail to advise individuals of how to use the cards or how easy it is to find yourself in debt with a swipe here and a swipe there of the cards. College students should not be allowed to apply for credit on his or her own.
Credit card companies target the college student because they are the ideal consumer. Right out of high school with the false sense of adulthood and responsibility, the companies know that students do not know the adverse effects of using credit irresponsibly. The value of their credit score is not important and the companies target that. The average drop for one late payment of 30 days can be up to 110 points for higher credit scores and 45 points for maxing out the credit limit (Consumer Action). They apply for the cards and are approved and the only numbers they see are the limits they have been approved for. Students are not looking at how hard it will be if they get into debt because of the penalty fees and interest rates that apply to outstanding balances each due date, which are higher for cash advances on the cards. The average late fee penalty is between 25.90 and 28.19 per card (Demos.Org).One should be understanding of have a credit card for emergency purposes while away at school that a responsible parent can monitor the use and the amount of credit he or she
Debt has become a real issue in this economy and credit cards play a major role in assisting the problem. Adults are barely responsible enough to budget their expenses and credit card companies are now prying on college students. Just coming out of high school a 17-18 year old does not have the mind capacity to understand finances and the importance of a good credit history. The credit card companies bombard students with enticing offers of credit limits; cash back reward options, and no annual fees. They however, omit the high interest rates and penalties for not paying the balance off in full or for having late payments. The companies also fail to advise individuals of how to use the cards or how easy it is to find yourself in debt with a swipe here and a swipe there of the cards. College students should not be allowed to apply for credit on his or her own.
Credit card companies target the college student because they are the ideal consumer. Right out of high school with the false sense of adulthood and responsibility, the companies know that students do not know the adverse effects of using credit irresponsibly. The value of their credit score is not important and the companies target that. The average drop for one late payment of 30 days can be up to 110 points for higher credit scores and 45 points for maxing out the credit limit (Consumer Action). They apply for the cards and are approved and the only numbers they see are the limits they have been approved for. Students are not looking at how hard it will be if they get into debt because of the penalty fees and interest rates that apply to outstanding balances each due date, which are higher for cash advances on the cards. The average late fee penalty is between 25.90 and 28.19 per card (Demos.Org).One should be understanding of have a credit card for emergency purposes while away at school that a responsible parent can monitor the use and the amount of credit he or she
Cited: Page Chu, Kathy. “Average College Credit Card Debt Rises with Fees and Tuition Increase”. USA Today. 13. Apr. 2009 Print. “Consumer Action Credit Card”. Survey. (2009). Web. 19. July. 2012 “The Economic State of Young America”. Demos. Org (2008) Web. 18 July 2012