College Students Facing Credit Challenges

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Rough Draft
Leigh Ann Ofeimun
COM/156
September 4, 2011
Lisa Acerbo

Rough Draft

The credit card companies are using vigorous practices to entice young college students to get credit cards, and paired with the gaining “high social status” and self-gratification, students have completely bypassed the responsibility of getting an education about credit card use and how to stay out of debt. The use of free gifts and food by credit card companies has contributed to the students’ lack of concern for the importance of learning and asking questions, such as, what are the current interest rates for the credit taken and will they have the ability to repay the credit used? As college students pass the credit card companies’ tables set up with several enticing “freebies” such as: T-shirts, Frisbees, water bottles, and even free food, the consideration of learning the basics of building credit and how to go avoid indebtedness, falls by the wayside with the excitement of free gifts. Students are more susceptible to credit card companies and their attractive “enticements” and, therefore, credit card companies should not be allowed on college campuses.

According to CreditFYI.com(2004), “Aggressive credit card marketing on college campuses today ignores standard underwriting practices that consider factors like credit history, debt-to-income ratio and income.” If these factors are taken into consideration when a college student applies for credit, would a student have the same chance of being approved for a credit line? The student may not even have an understanding of the above factors and credit card companies are taking advantage of the naiveté of the student. This leads to the age factor of college students. Most freshmen are on average 18 years old and just out of high school. Most 18 yrs olds do not have life experience and will take the credit card vendors at face value, never considering the underlying problems they will face when having applied and approved a credit card.

This is where parents have a responsibility to educate their children about the practices of credit card vendors and their “predatory enticements” of our college students’ eagerness to apply for credit cards. As stated by Mary Beth Pinto, Penn State Erie Professor: “Parents need to educate proper use of credit to their students and teach them what is acceptable usage” (www.creditcards.com 2010). Parents need the help of the government to get the credit card companies to disclose the information needed at the time of our students applying, instead of credit card companies assuming the student is reading the pamphlet and disclosures provided. With new laws in effect, the credit card companies will have to take more responsibility for the practices and will not be allowed to set up tables on or near campuses and lure our young students with free gifts in exchange for applying for credit. As stated by Creditcards.com (2010), “In addition, the law restricts credit cards for anyone under the age of 21.” With two important exceptions to the law, an adult younger than 21 can obtain a credit card if a parent co-signs and accepts responsibility for the debt or the young adult is able to proof of income or able to show they have other means of paying the monthly card payment.

The government is trying to take an active role in providing guidelines for the credit card companies to follow, college campuses should take an active role in providing and following certain guidelines, such as, a minimum allotted time for credit card companies to be on campus and also limited free gifts given away. We know college students are young adults and should be able to make their own decisions, so colleges should include classes on debt awareness and management, in order, for the education to continue beyond the credit card companies. The colleges’ can also provide some type of counseling or counseling services to college students, to provide the needed guidance...
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