Credit cards are powerful objects that can be used for good or evil but are also objects that, when used incorrectly, can lead credit scores and financial stability down the drain. Before 2011, which was when the CARD act was established, thousands of college students had independent credit cards, which brought thousands of dollars of debt. Because of this and a parent's negligence of teaching their child about the good and bad that a credit card can bring, college students should not get to have independent credit cards.
College students are easily enticed by physical goodies, such as the items that card providers give them, making them an easy target for credit-card marketers. David Wantz, a member of the South Bend Tribune, polls the freshman class of the University of Indianapolis at the beginning of every school year. He states that nearly every freshman each year had at least one credit card, while two-thirds of the students had two credit cards. The scary thing was that about 1 out of 10 of the students he polled had three cards, and twenty freshmen from one group had said that they had four or more cards. Before the CARD act, this was happening year after year. This is not just occurring at the University of Indianapolis (which is where David Wantz polled the freshmen), but also at Georgia State University.
Credit cards were also easily obtainable on the college campus. A student by the name of Steven Mayerhoefer told Mrs. Aird that he was offered credit card applications practically every day. "They just hand those suckers out to you, " he told us. "Anyone can get a credit card." Many credit card companies would go as far as to send offers through the mail to kids as young as 16. Even though some colleges told credit-card providers to not give out credit-card registration forms on their campus, they would just move to close to the campus. Some students, such as Lisbet Minoso, thought that the college had given them permission to do this close to the campus.
College students struggle under the grasps of instant gratification and fail to realize the large amounts of spending they do and how this can affect them in the future. The amounts of debt that pile up on a student can come quick, so quick that it can overwhelm them. When reaching the limit, most students just get another credit card and act as if the damage has gone away, when it is really just covered with a towel. This is the reason that many students that David Wantz polls have many credit cards.
Many students do not understand the credit card and have misconceptions about it. One freshman, Sean Murphy, thought of having credit cards as having free money. This led him to around $1,000 in debt and had to have outside help from his father. Sean is not just one of the few, however. From two surveys, 65 percent of college students have debt, with 50 percent having hit the limit on more than one card. Twenty percent of the undergraduates had no clue about a fundamental part of their spending, and that was the annual percentage rate of interest that is on their most used credit card. College students also do not understand that the money that they accumulate can affect their life after college because it affects their credit score. This can make it very difficult for them to do things such as finding a job, buying a car or house, or obtain any kind of maintenance service. A woman by the name of Sanyika Boyce accumulated over $24,000 dollars in debt, but unlike most college students, she worked diligently to pay all of her debts back. It took her working two jobs for six years to pay off all of it.
Credit has also shown to cause a large amount of the problems in a student body, which are obtaining anxiety, dropping out, filing for bankruptcy, and on some occasions, committing suicide. The common laziness of a regular student will also keep them in debt and lower their credit score. Not only does the average college student have debt from overusing the credit card, but most of them have student loans taken out, which will only add to the debt. The Georgetown University Research Center has concluded from a recent study that college students are three times more likely to be 90 days delinquent on their credit-card payments than older adults.
The truth is that the educational system and parents aren't doing enough to teach their kids about the powers of the credit card and how to properly use it. The parents and adults of the present world believe that since college students have grown up around credit cards their whole life, they would catch on to how to use them. Catherine Pulley, a spokeswoman for the American Bankers Association, makes that statement and believes that it is silly to think a college student would be persuaded with a t-shirt. However, it is not always a t-shirt or goodie that entices a university student to fill out for a credit card. A student of GSU states that, "Sometimes you have to stop and talk to them so they can shut up."
There are the few college students, however, that have parents that educated them and showed them how to properly use the credit. Even with this, the majority of the college students do not have parents who thought about teaching them about the credit card, and by the time that they ever thought about it, they would be too late.
One answer would be to teach students about the credit card, but most students would ignore this information, finding it boring and believing that they will never have to use it, or will say that they will learn it when they absolutely need it. By the time that they feel like they really need the information, it will most likely be too late. Their actions will have fallen upon them and they will be in debt with their credit score diminishing.
In 2009, the Congress noticed the immense debt from college students having independent credit cards and decided to do something about it. They passed an act called the Credit Card Accountability Responsibility and Disclosure Act. To an enormous extent, this stopped college students from being the prey of companies that saw them as just a "growth category." College students can now only get a credit card when they are below the age of 21 if they have a job or are co-signing with their parent. Now, college students are not diving into the world of credit cards headfirst without knowing of the possibilities. Even though large amounts of debt is still accumulating throughout the world, and credit scores are still being destroyed, college students have a lower chance of getting into trouble with debt because of their own mistakes.
Credit cards are powerful pieces of plastic that can hold a lot of worth in any currency. Because of this, they could also slow down or even completely stop the lives of a college student. College students are still children so when they swipe their card, they don't think about having to pay off the debt or think about all of the money they have used building up as debt. The lack of education that is directed to kids about credit cards and the lack of parents teaching their kids about them is one of the primary reasons as to why I think that college students should not get to have independent credit cards.