It’s all part of the game

By Jessica Stanley
For the Times West Virginian

March 16, 2008 10:33 pm

— "No yearly fees!” “Sign-up now and earn rewards!”
When walking across college campuses, one may hear these exclamations from banks trying to convince students that getting a credit card is a crucial thing.
In fact, 58 percent of college students surveyed said they saw credit card marketers on campus for two or more days at the beginning of a semester, according to an August 2007 article by David Migoya. (the rest of the article can be found at http://www.denverpost.com/search/ci_6692541)
While credit cards can help people to gain a better credit record, misuse can lead to drastic situations, such as mountains of debt and bad credit. And it’s all downhill from there.
According to a 2005 report by student lender Nellie Mae, only 21 percent of college students pay the bills off monthly, with 25 percent of students owing more than $3,000, though the average balance is $2,169. What those students may not realize is that when they get behind on payments, the amount they have to pay per month increases.
So why do banks pursue college students as customers? Geri Detweiler of ultimatecredit.com said in an article on the dangers of credit cards (http://www.msnbc.msn.com/id/14031324) that credit card companies and banks recognize the benefits of catching consumers while they’re young. “If they can be in that kid’s wallet, they are more likely to have a customer for a good long time.”
A 2006 study by the American Council on Education found that while a majority of college students pay off their monthly balances, 1 in 4 used their cards to pay tuition. In regard to these figures, associate director of the Project on Student Debt, Lauren Asher, stated “using a credit card is basically taking out a high-risk loan,” adding that there are safer alternatives, such as federal student loans.
Students also often don’t recognize the future risks of developing credit-card debt. Norma Mendoza, a researcher for the University of Arizona was quoted on chiff.com as saying, “Not only do they not realize how the credit card system works, they don’t understand how it can impact their prospects for employment when they graduate.”
Mendoza, who is an assistant professor of marketing and logistics in the Sam M. Walton College of Business, added, “Bad credit or excessive credit card debt is considered a character flaw.” This characteristic is especially noted when one is applying for jobs in the banking or information technology, where the person might be more tempted to steal to repay debt.
Thinking about obtaining a credit card? Be sure to do your research, pay off balances on time and do not be unnecessarily reeled in by perks. As Joan E. Lisante from consumeraffairs.com says, “Like carnival games: You throw $15 worth of balls to win a $2 stuffed gorilla.”

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