Posted on 04/04/2008 8:29:14 AM PDT by outfield
College students want credit card companies to market themselves more fairly, according to a nationwide survey taken by a credit card watchdog group.
1500 students from 40 different colleges were polled and 80% of the students felt they were lured into bad credit card deals and have been racking up big bills before they graduate.
Second year student Carol Castillo feels the credit card companies tricked her and that hidden interest rates and other fees not made clear by credit card companies put her in a bind.
"Well, now I am in trouble and now I owe over $3000 in credit card debt."
At UCSD Thursday morning, representatives with a non-profit consumer group talked about having these credit card companies regulated on campus, including banning free gifts and stopping the credit companies from sharing students' names.
In a statement, representatives with UCSD told FOX6 News: "We at UC San Diego encourage our students to be cautious and prudent when it comes to these kinds of financial matters."
We contacted all the major credit card companies on the issue but they did not respond.
“1500 students from 40 different colleges were polled and 80% of the students felt they were lured into bad credit card deals and have been racking up big bills before they graduate.”
Just like people were lured into McDonald’s and then blame them for being fat.
Welcome to Real Life.
Consider dropping out of college and apprenticing with a trade. Tradesmen can always put bread on the table and you get to collect useful things such as wrenches and welding goggles.
“Lured” ???
Lured? More victims?
Of course, they had no choice in the matter. Pathetic attempt to abnegate responsibility for profligate personal choices.
I’m going off to college next year. My parents got me my first bank account and debit card for my 16th birthday exactly for the reasons outlined in this article. More parents should do things like that to teach their children about money.
While I agree there has to be personal responsibility there, the credit card companies really do go after college students very hard with all sorts of freebies, and cards with low introductory and teaser rates. They give out these cards even with the near-certainty that the student will get into trouble and not be able to pay...at which point, wham, here comes the 30%+ interest rate that ensures they’ll be years paying it off.
}:-)4
Sometimes life ain’t fair and if your parents let you out of the house without telling you that then shame on them. You have debt, pay up and get on with it.
mrs
Yup...all the more reason to “Just Say No.”
But at least they got their free t-shirt when they applied to get the card. That’s one of the ways these credit card companies “lure” college students into getting cards. They get a t-shirt for applying. I got mine when in college and a lesson in money problems thanks to high interest rates. I also didn’t bitch and moan about it afterwards. I got myself into the mess and got myself out of it too.
Does a water bottle and a t-shirt constitute being lured into something?
If they are this gullible and/or stupid they don’t belong in college.
But there is no reason they aren’t qualified to run for high public office.
I guess the Govt. can just print up another $30 billion to pay off all credit card balances for college students.
/sacasm/
I didn’t own a credit card until I was 29 years old and well past college and graduate school.
What’s with young people nowadays?
Translation: "When I was late with my payment, I had to pay a $25 fee and lost my introductory rate of 8.9% and now have to pay 21%. They also did not tell me paying the min $19 a month on 3,000 would take 100 years to pay off."
Anyone who thinks that this is not an example of the wealthy oppressing the poor needs to have their glasses changed.
I guess a “Bad Deal” from a credit card company means you actually have to pay it back...
If they are that stupid, they are going to stay poor, and there is nothing anybody can do about that!
Personal responsibility is not known by these kinds of students.
But the "free gifts" are the very best kind!
It takes 15 years of schooling to get this stupid. And 3 grand is nothing compared to the $120k she wasted on her worthless diploma. Wait until she figures that out. Then again, maybe she never will.
Yeah, but they were lured into college with the notion that an English or political science degree could earn them millions, but ended up $25,000 in student loan debt.
I call BS. Her spending put her in a bind.
We all KNOW that our public education system is NOT teaching adequate math skills -- including those needed to understand, to comprehend, to be able to calculate the long term costs of these offers, yet like some schizophrenic we ALSO want to hold them to account for that which they do not know? This college generation more than any other needs MORE protection, not less from these credit card hawkers.
How about 12+ years of brainwashing in the Imperial Federal Government School System?
They know next to nothing about how money works but they have terrific self esteem.
Home school/private school BUMP!
I worked for, what was at the time, the largest Master Card issuer in the world.
I learned more than I ever wanted to about the underhandedness of the industry.
The biggest thing is the 'cash advance' scheme. They have had to be a bit more transparent with it due to legal actions, but it can't still be slipped by people until it bites you in the nether region.
First thing you want to learn and teach everyone in your family: NEVER EVER take a "Cash Advance" or use the cash advance checks. Order your issuer to NOT send those periodic checks - (they are also easily stolen - and then all hell breads loose) BUT
Let's say you have a debt of $5,000 with $500 of that taken as a cash advance.
What you find out too late is their stealth tactics. When you make your monthly payments, not ONE CENT will applied to the $500 portion. That is kept separate and is charged a much higher rate than card purchases. That higher rate is added to the $500 each and every month.
Not one penny will apply to that UNTIL every cent of the card purchases is paid off.
By that time, that $500 has risen to 2-3 times the original amount.
If you get caught in this, look for a new card to transfer the entire balance at one balance and one rate and NEVER EVER again take a cash advance or use those checks.
Another trap is getting charged a late fee - and if you're close to your limit on the card, that can also trigger an 'over limit' fee.
People get caught in this one due to the old practice of 'monthly payments',
Billings used to be on a monthly basis. Most still are, like utility, mortgage, etc. But the credit card companies have switched to 14 payments a year - which changes the due date every month and, of course, they are calibrating your interest charge on 14 months balances, rather than 12.
If your payment gets there 1 minute after noon of the due date - blam, late pay't.
Now let's look at that "due date" - Even if you mail it 5 days before said due date, you stand a great chance of getting slammed.
They may have your payment in office days ahead but if they don't "process" it before the due date/hour - blam. (Think they don't use this?)
In addition, the post office is not nearly as reliable as it used to be.
The watchword is: as soon as you get that bill, run, don't walk, to the mailbox with your payment.
Another thing to be aware of: If, for example, you are going away for the time when your payment is going to be due - DO NOT make a payment BEFORE the new monthly billing date! They will take your money but it will NOT be applied to the new bill and you will come home to a 'late charge' -
Bottom line: Debit cards eliminates all the above, plus, no debt. Spring and tax returns are a great time to open your own personal credit card company: a Debit Card.
Then make monthly payments to yourself, keeping a comfortable level on hand. Another advantage to that is that if someone uses your card, they can't put you in debt, they can only get what you have on hand. And do not believe the myth that banks won't replace stolen funds from debit cards. They do. But the credit card companies would rather you use CREDIT - they don't make much off debit cards, can't charge you overdue fees, cash advance fees, etc...
If you can sit through 12 years of school and not be able to calculate an interest rate, you have only yourself to blame. It is not like the teachers are not trying to impart this information.
Maybe your education has to come through the mechanism of paying off $3000 in credit card debt at 24%.
The credit card offers could not be clearer. They all require explicit terms and conditions printed in big, bold lettering. It is simply not possible to fill out the form and not be informed of exactly what you are signing up for. If we are going to have individual freedom, then you are going to have to let people make mistakes, even stupid an costly ones.
The alternative is you let the government, who knows better, take care of the poor widdle morons who can't figure it out. Which is fine, until I need to apply for a credit card, and the government is stopping me for my own protection.
And the kids are to blame?
The kids will learn -- if we all survive it -- the hard way, but this is like teaching swimming by throwing a two-year old in the the middle of a deep lake. Most drown. But we can always claim a few great "natural" swimmers.
Real life! Yeah, in Ma Barker's household. I don't live there.
That reply, gridlock, is plain 100% unadorned stinking bull crap. Thanks for sharing.
Reminds me of the Bankruptcy thread where I got into a “discussion” over whether Irresponsibility or Medical Bills caused the most bankruptcies.
The stats show that 40% of Americans spend more per year than they earn, and overall, Americans have an AVERAGE of 5k credit card debt - well, yes, some unexpected expense is going to be a big shocker.
Whereas if you had savings instead of debt and bought some catastrophic medical insurance - the sudden expense shock wouldn’t bankrupt you.
I agree with that comment. While students should exercise more responsibility, so should the lenders. After all, they are loaning large sums of money to people who have no job and have never been “on their own”. And then they have the audacity to express moral outrage when those people they loaned moeny to can’t pay up.
But it’s ok to be lured to college to be saddled with tons of college debt.
That's crap - better be reading the small print with a very BIG magnifying glass - see my post # 28
Unless you are an investment bank then you can get bailed out by the US taxpayer which really isn’t the sort of message that we should be sending.
Should you be responsible for your own actions?
If you make an informed decision to do something stupid, should you be held responsible for you actions?
Unless the answer to these questions is an unequivocal "yes", you invite the government to come in and control your decisions to keep you from making a mistake.
The same credit card deal that gets one college student into trouble is a useful and fully beneficial convenience, if managed correctly by another. How do you keep the irresponsible college student from making mistakes without penalizing the responsible ones?
You described it: liberal dimwit pampering from nursery school thru high-school and into college, parents abrogating responsibility to teach their kids even basic lessons. Real Life is not MTV, sitcoms, commercials, or liberal bumper-sticker wishes. Eventually they gotta see what life is all about. And Harsh lessons are most memorable. That’s how they learn the hard way. That’s how I did. If you taught your kids, and they took the lesson to heart, then they’ll be fine.
I will say this, credit cards being marketed to college kids have entirely different “terms” than the ones I normally receive.
My kid just recently graduated from college and he gets a lot of credit card offers in the mail. (He has had a credit card for years and pays it off every month, so I guess his credit score increased, and now he’s being inundated.)
I took the time to read the terms of one or two of the CC offers he received (he tells me to tear them up and throw them in the trash when they come to our house, I figured I’d read what they were offering.)
Let’s just say it was like reading a foreign language...in comparison to what the terms on my CC are. Sometimes the CC appears “free” but the kid is actually charged an annual fee (sort of like AMEX), but you have to read pretty deep into the fine print to realize this. The no interest offers aren’t straightforward like the ones I’ve seen on the CC’s I’m offered, and the credit limit stated (if you read the fine print) is not the credit limit the student is likely to receive.
Yeah the kids have a responsibility to know what they’re getting into, but IMHO, a company should not knowingly mislead folks, be it college students or anyone. Some would say it’s a free market, or capitalism at work, but it’s thievery in my book.
this is because their parents did not teach them about debit properly. Their parents probably have credit card debit out the wazoo and see no problem with it. I taught my son correctly and he so far has turned them all down... I have great hopes for him.
Some credit card companies are (grudgingly) getting better about disclosing terms and conditions in plain English and not in two-point Times Roman legalese. But they’ve still got a long way to go, and not all of them are doing it, especially on loans to students. I can pick the stuff out of a disclosure because (a) I’m 41, and (b) I contracted at a major credit card lender off and on for seven years. (You probably know who they are, love their commercials, and hate their mass mailings.)
These are basically very similar to subprime mortgages. They’re loans to marginal credit risks, whose ability to pay is often limited either by low salary, or by stupidity. Just like in a subprime mortgage, if you make the decision to get one, yeah, the primary responsibility is on your head. But that doesn’t mean that the company that loaned you the money, KNOWING that you’re probably going to end up paying 30%+ default interest rates that leave you unable to pay it off, isn’t doing something scummy.
}:-)4
Every credit application I have ever seen has a table, which clearly spells out the interest for carried balances and cash advances, along with fees and penalties. Granted there is always fine print, but these kids are, generally speaking, being caught up in things that are printed in the bold print, like having to pay interest on balances or being charged more for a cash advance.
These are college students, right? Presumed to have obtained some level of education beyond the ABC’s, no? I wonder how many of those responding were finance majors?
But there is no reason they aren’t qualified to run for high public office.”
What also is scary is they vote.
HUURAH....you win....a college education today (for many) is just WASTEFUL!
God knows college students do a lot of dumb stuff. The credit card companies have no business issuing credit cards to students with no jobs. The companies expect the parents will pay it back so as not to see Junior’s credit ruined. And more often than not, the parents do.
It has nothing to do with not teaching your kids about debt. It has everything to do with the fact that college kids see the conspicuous consumerism of their wealthier contemporaries and want everything they see. They see kids that are sent to school with credit cards, paid for by their parents, and the card companies tell them, you can have one too. The only thing that would make an impression on the kids is if you didn’t pay for their education, if they had to earn it.
People should assume that everybody but their Momma is going to try to put one over on them, and sometimes they should be giving Momma a long look, as well.
Not disclosing terms is illegal. Assuming we are talking about legal activity here, people should be allowed to enter into voluntary contracts, shouldn't they?
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