When you think of college students, what comes to mind? Studying, frat parties, kegs of beers, trips to Tijuana, Spring Break. Those are the typical things that we think about immediately, but what about what lies beneath the surface?
If you’re currently a college student, know a college student, or have been a college student in the past, you’re probably aware that universities in the United States make for sizzling advertising space. After all, what better place is there to find America’s newest young spenders than a college campus?
As many young adults leave home for college, they face new levels of responsibility, and experience of a level of freedom they had likely never dreamed of. Unfortunately, many students don’t know how to balance their new sense of freedom with the increased responsibility.
Whether it’s missing classes, or partying too much, some young adults just can’t seem to keep stay organized and responsible. Enter credit cards. Most colleges allow credit card providers to set up a kiosk on or near campus, offering credit cards to any and all students walking by. Usually they provide a cheap incentive to sign up, such as a free teddy bear, chocolate bar, or basketball.
Even students who hadn’t planned on getting a credit card may fill out the application simply to get the incentive, and before you know it, those unsuspecting students are charging up purchases and falling into credit card debt.
This type of thing happens thousands of time a day throughout the United States, as more and more students get recruited by credit card providers to open up student credit cards. So much so that nearly 80% of all students have a credit card, and an average of three credit cards per student. And the average credit card debt carried by college students is around $2,200, which for many can be overwhelming, and end up costing the student double that as they attempt to pay it off for years and years.
The scary part about all of this is that most of these credit card providers don’t require students to have a job or any real steady income. If they say they do, it’s simply a formality on the application to get the deal to go through. And though these credit card providers include a pamphlet of how to manage credit, how many college students actually read through it?
The bottom line is that college students don’t know how credit cards work, and with nearly all students carrying one or more by the time they leave college, better education should be provided. Most of these college students carry their credit card debt well past their college days, and start families with their past debts, often learning little about how credit works along the way.
Of course this only increases profits for credit card providers, who reap the rewards of late fees and penalties. That said, credit cards are not a necessary evil, nor are they necessarily a negative thing. Credit cards can be very helpful, and allow consumers flexibility and convenience, but without education and responsibility, things can get messy fast.
College students can be particularly vulnerable because of the idea of getting “free money”, often before having a real job and truly understanding the value of money. Parents should also do their part to educate their children and monitor their spending habits, possibly co-signing their child to one of their credit cards before college to educate them about credit card debt.
College can be a critical credit building period, and one that will shape many young adult’s lives for years to come. Credit mistakes now can reverberate well into the future, potentially when looking for a mortgage or an auto loan. Smart choices now will equal big savings down the road. Practice responsible spending and educate yourself about the fees and terms of your particular credit card(s). And read blogs like this to better understand credit cards and the choices you have.
If you’re a college student, learn how to use credit card balance transfers and how to raise your credit score.
