Bad Credit?

Join the club

Credit cards a serious risk

 for many college students

They come to you while you are having coffee at Coffee Express. They call you up in the middle of dinner. They stuff your mailbox with offers. As if that is not enough, they insert ads in the papers and flood your favorite shows with seemingly irresistible offers.

No, they are not potential suitors; they are the credit card companies.

For some, fighting off credit card offers has become as much of the dinner ritual as having salads and potatoes.

"My parents get about 10 solicitation calls during dinner time," said Mike Conway, a sophomore philosophy and political science major. "I think these things can get out of control."

"Sometimes, when I'm irritated, I just hang up, but sometimes I listen when they're informing me of a better deal," he said.

With the market awash in credit card deals, finding a good deal can be a daunting task. A check at a banking website: bankrate.com indicated that  Pulaski Bank and Trust offers the lowest rate of all cards surveyed. At a rate of 8.75 percent with an annual fee of $35, it is easily the card with the cheapest rate. The average for all cards surveyed is 17.56 percent.

Although there has been some commericialization of the school by credit card companies this year, it was much tamer compared to efforts in previous years.

" They used to solicit on campus like crazy," said Conway, adding that even fraternities were roped in to help efforts last year.

" The school is basically encouraging students to assume debt," Conway said. " They're encouraging irresponsible behaviour with credit cards.

He also remarked that freshmen may be especially  prone to the problem since their payments may have been cushioned by their parents.

The average student on campus has 3 credit cards and a total of $800 in the balance, according to a survey conducted on campus.

Professor Ed Marlow, whose financial management class conducted the survey, said he finds the figure "somewhat troubling".  Unless parents are paying off their credit card balances, students will have difficulty paying it off themselves.

"It almost looks like free money for a while." he said.

Students should try to make the minimum payments even if they have payment problems, Marlow said. If they anticipate problems in paying, they should call their credit card companies before payment is due.

"Usually, if you give them notice, they are willing to work their way around some of those things," Marlow said. "If you miss the payment without any explanation , that is going to hurt your credit rating."

Contrary to popular beliefs, there is no evidence indicating that the more the credit card is "maxed out" the faster the credit limit rises. Credit limit rises only with a good credit history and regular payments, Marlow said. He also disagreed that credit card companies target students as a whole.

"Students are not taken advantage of more than anyone else," he said. "Increasingly, credit card companies view students as a good risk. Their view is that once they graduate, college students will have good jobs and will be able to make their payments."

However, Marlow cautioned students not to take that as a given.

"Students may be tempted   to acquire huge credit card debts in anticipation of the high salaries after they graduate," Marlow said. "It may not be that easy." 

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