Student Credit Card Debt is on the Rise
Dallas Kalmar The Spectrum
Issue date: 11/17/05 Section: Features
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Nash might as well be addressing the college students of present day America, who have accrued the highest amount of personal debt in national history. Thanks to increased spending habits, credit cards furnished without request and eye-popping tuition hikes, it's no wonder so many young people buy now and pay the minimum payment later.
In addition to student loans, the average undergraduate college student has four credit cards and $2,200 in credit card debt, this mostly due to aggressive marketing by credit card companies. At interest rates between a whopping 18 and 24 percent, students may be paying off their debt well into their thirties or forties, if they aren't careful.
"As soon as I started college my freshman year, I received an MBNA MasterCard in the mail. I never applied for it, but began using it indiscriminately. My $500 limit turned into a $1000 debt within months," said Brittany Neive, junior, Albany, N.Y.
College-aged students today are being referred to as the "indentured generation," a much warranted title. While doing all of the things expected of them, like financing an education and a car without the immediate available funds, young people are left without much choice.
Hans Riemer serves as director of the Washington, D.C. office of Rock the Vote, a Los Angeles-based nonprofit organization that promotes political activity among young adults, comments on this nation-wide epidemic.
"This generation is financially stressed. As tuitions rise and grants are cut, young people are increasingly financing their education on their own, through loans. At the same time, the laws that freed up banks to market more heavily to young consumers and students are wreaking their effect as this demographic is increasingly falling back on credit cards to make up for what they are losing in wages and student aid," said Reimer.
In addition to covering basic needs, frivolous credit usage tends to be the main culprit for excessive debt.
"I've had a credit card since freshman year, and I probably use it the most for dining out, I prefer not to be indebted to anyone, so I try not to use it," said Joe Giannetti, senior, New York City, N.Y.
The way credit card debt is handled will follow the charger for many years. Maxing out one's credit line, not paying bills on time, and collecting credit cards like they're going out of style will ensure a poor credit score after graduation. Credit is all one has, without it getting an apartment, obtaining a home or car loan, even getting a job, will be very difficult.
"My credit went from non-existent to frightening in my first two years of college. I couldn't even get a cell phone. Now that I am a senior with a budget, my credit score is to be envied," said Jessica McCann, senior, Guilford.
Credit, if used wisely can work to one's benefit. As a student that bears the burden of education loans, a budget is the foundation for financial freedom. Good credit is attainable by purchasing something that is affordable, and paying it off right away.