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Editor’s Note: This is the first article in a two-part series on student credit card debt. The conclusion will appear in Monday’s issue of The Maine Campus.
The term “poor college student” has become almost synonymous with the idea of going to college. Despite this warning, however, many students find themselves facing thousands of dollars worth of debt because of one small, plastic object: the credit card.
According to a study conducted by the National Center for Education Statistics in 2000, 44.7 percent of all college students in the United States have some form of credit card debt. The range of debt due is rather large, with some students barely owing anything, while others owe in the thousands. The average amount owed by individual college students, according to a similar study conducted by the NCES, is $3,066.
In a study conducted in 2000 by Nellie Mae, a student loan agency, it was found that roughly 78 percent of all college students have some form of a credit card. This jumped over 10 percent in a two-year period from 1998.
Only half of all students with cards pay off their bill each month, according to truthaboutcredit.com. The average late fee was $27.61 in 2000. For students with little or no steady income, fees such as these can begin to add up, causing debt to grow drastically.
According to truthaboutcredit.com, the average student does not even qualify for credit, due to a lack of credit history or a job. Credit card companies, however, look past this because of the value students hold as customers. According to Nellie Mae, this value is due to the fact that most students stay loyal to their first card throughout the majority of their life.
This value leads to the utilization of aggressive advertising. Companies use extreme tactics when appealing to college students. According to the NCES, 58 percent of all college campuses have at least two companies promoting their cards a month. Salesmen utilize selling techniques such as offering free gifts to coincide with signing up for a credit card. These gifts can be anything from a free T-shirt to a portable CD player.
In order to combat the possibility of debt, Visa gives an outline of how to properly manage credit whenever a card is given to a college student. This still does not stop a large number of customers from accruing serious debt.
Many students don’t realize the severity of debt, and others don’t seem to care. Credit cards are more attainable by students then ever, and many students are taking companies up on the offer. As long as students want the cards, the companies will keep offering, without any concern to the possibility of debt.
According to the web site truthaboutcredit.com, all a person needs to do is have a realistic view of debt and be smart about dealing with credit. This mentality can be challenged by the idea that some students don’t see debt as important. According to NCES, most students plan on paying off their school year debt with summer jobs. This method can work, thus allowing students to see no problem with accruing small amounts of debt.
“It [debt] happens, and I’m not worried about it yet,” Sarah Waldon, a senior English major, said. “It’s really not a big deal.”
