credit cards

credit cards

Credit Cards Hold Risky Future Implications for Students

Empty pockets are a common problem college students face. The financial demands of housing, books, tuition, transportation and living expenses are challenging enough. Forget about having extra money for movies, eating out, clothes, vacations and other money gobbling activities that college students wish they had the cash for.

Credit card companies know this best, and that’s why they target students with “too good to pass up” deals. It may seem like a great deal to score a free meal at the local sandwich shop just for filling out a credit card application, but the implications of credit cards for college students are not worth the free lunch.

Go to any neighborhood surrounding a college campus and chances are you’ll see tables stacked with credit card applications offering free food, books, gift cards, etc. Card companies know that the future implications of credit card debt may not be the foremost thought to a hungry, broke student when the opportunity for free stuff presents its self. The result creates a naïve credit-card yielding college student with a free sandwich.

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College Students Get a Crash Course in Credit Card Debt

Student Credit CardsMost college students know what it’s like to live for the whole year off the money they made working over the previous summer. Existing on Ramen noodles and peanut butter, they do what they can to make that money last. But what happens when they are tempted by those dangerous credit card offers that are made readily available by the campus cafeteria or outside the football stadium? I remember how easy it was to apply for one after being lured in by the free T-shirts and water bottles.

“Too many college students go off to school without understanding finances,” said Shalonda Jones, a representative of the National Foundation for Credit Counseling. “Parents make the mistake of not introducing financial literacy to children at a young age, and most parents are equally clueless as to what it takes to remain financially stable,” she said. “We all know when you’re away from home with a little freedom and money, students tend to take that freedom and lose their heads.” Read the rest of this entry »



Student Credit Card Debt Rises With Tuition Hikes

credit-cardIt’s a correlation no one can deny. As college tuition and fees continue to rise (up 50% in the past 10 years), so does credit card debt. As fewer families have the cash to support college students, more students are charging their tuition, books, fees and other living expenses just to get by.

According to Sallie Mae, the average undergrad has a credit card bill of $3,173, up a startling 134% from $2,169 in 2004, and the highest amount since the organization began tracking in 1998. It seems that tenure in school correlates to debt as well, with seniors owing twice as much as freshmen.

This new study from Sallie Mae uses March 2008 data; due to the state of the economy since then, they warn the actuals for 2009 could look worse. Read the rest of this entry »



Are Americans Financially Illiterate?

Lauren Willis of the Loyola Law School, Los Angeles

Lauren Willis of the Loyola Law School, Los Angeles

The answer is yes. Most Americans do not have the financial understanding necessary to navigate the terms of their credit card agreement, and yet studies suggest it should stay that way. Lauren Willis of the Loyola Law School in Los Angeles recently wrote a controversial paper entitled “Against Financial Literacy Education” that suggests most people aren’t capable of keeping up with the complex and fast-changing regulations or metrics that drive our financial industry.

In it she states that attempts to financially educate people have been costly to the government and met with limited success, citing several cases in which test scores were lower among those who had received a financial education than those who hadn’t. She further argues that financial education tends to increase the confidence of the consumer, but fails to increase their ability to make good financial decisions. Willis believes that financial matters should be left to experts rather than individual consumers, much like the fields of law and medicine.

What do you think? Let us know in the comments.



College Students Prey for Credit Card Companies

credit cardsWith the start of the new school year, college campuses will be filling up with doe-eyed freshman, school spirit, pink slips for classes… and credit card companies. Luring students with school t-shirts, backpacks and other goods, they wait outside of classrooms, in the Union and at football games.

Be prepared. Understand your credit score, the ramifications of having credit cards and the debt and let your first college lesson be financial responsibility.





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