Credit Card Debt in America

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Inga Gudmundsson
15 October 2008
English 100
Analytical Essay


Credit card debt is one of this nation’s leading internal problems, and it has been for around the last 3-4 decades. When credit was first introduced, and up until around the late 1970’s up to today, the standards for getting a credit card were very high; so not everybody could get one. The bar got lowered and lowered to where, eventually, an 18 year-old college student with almost no income and nothing to base a credit score on previously could obtain a credit card (much like myself). The national credit card debt for families residing in the United States alone is in the trillions (Maxed Out). The average American family has around $9,000 in debt, and pays around $1,3000 a year on interest payments (Maxed Out). Many people have the concern today that these interest rates and fees are skyrocketing; and many do not understand why. Most of these people have to try to avoid harassing collecting agents from different agencies, which takes an emotional and psychological toll on them. While a lot of the newly recognized “risky” people (those with a doubted ability to make sufficient payments) are actually older people who have been customers of certain companies for decades, the credit card companies are actually consciously targeting a different, much more vulnerable group of people: college students. James Scurlock produced a documentary called Maxed Out on this growing problem, in which Senator Jack Reed of (Democrat) of Rhode Island emphasizes the targeting of college students in the Consumer Credit Hearings of 2005

James Scurlock strongly emphasizes this problem throughout the whole documentary. Students, ranging in ages from 18-22 primarily, are young, and naive. They are out from under their parent’s rule and free to make decisions on their own. This means that many are going to take certain steps necessary to make themselves feel they are more adult-like. According to a study done by the Rutger’s University Senate, the average income of a college student is usually going to range from nothing to something little in substantiality; but their future potential for making money is larger than of those who do not attend college (Student financial…). James Scurlock sheds light on the fact that these credit card companies are going to do anything they can to get these kids to sign up. The companies send students a lot of advertisements for credit cards in the mail, and they will even come to college campuses and set up booths where anybody can apply for a credit card; usually using free give-a-ways as a form of bribery. According to an article by, a survey done in 2008 by the U.S. Public Interest Research Group found that 80% of students received direct mail from card companies, and 22% said they received about four phone calls a month, on average, from these companies. This extremely persistent marketing and extreme lack of financial experience and discipline leads many college students into serious debt. Students are also a large target because credit card companies know that they often hold onto their credit cards until adulthood; and this is how one builds loyalty to a company. Also, if they fall into severe debt, parents are more likely to help bail them out than parents are likely to bail their adult children out (Dickler). In a survey taken of college students, 66% said that they do own credit cards already, and more than half of that 66% say they use them for day-to-day expenses and books (Kovak). One in four of these respondents said they have paid at least one late fee, and 15% said they have paid at least one over-the-limit fee. Around 6 percent had had at least one card canceled for nonpayment (Kovak). This is too heavy of a burden for people of this age and experience level to carry. On top of this, there is one factor that makes paying principle debt alone virtually impossible.

Interest rates and...
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