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My campus -- invaded by credit cards!

Editor's note: Kate P. Morse was a junior at Wake Forest University in Winston-Salem, N.C., when she wrote this story for Bankrate.com.

My first day back to Wake Forest University after winter vacation was when I really started to notice the overwhelming presence of credit card companies on campus.

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The day began with a trip to the bookstore, where I elbowed my way through the narrow isles, congested with students clutching baskets of books in one hand and credit cards in the other. I navigated through the maze to the cash register, where students were lined up to pay for their books -- with plastic.

The student in front of me at the register pulled out his MBNA master card with the Wake Forest Demon Deacon on it. The cashier said she wanted to get one of those cards, since she liked the look of them so much. When I purchased my books, the cashier grabbed a handful of business reply cards and pamphlets from different credit card companies, all proclaiming how student-oriented they were, and stuffed them in the bag with my books.

After I left the bookstore I walked through the lounge of one of the dorms and found myself looking at a poster advertising a credit card company's student credit card. Many more credit card offers were waiting for me at the post office when I checked my mail.

The credit card companies seemed to have invaded school and set up camp. Wherever I looked, there they were.

Fortunately, I had practice with plastic
Having a credit card is not a new concept for me. My parents gave me one in high school and taught me how to manage my money and realize my spending limits. I knew that having too many cards or charging too much on a card would put me in debt.

A lot of college students are not as prepared for the barrage of credit cards thrown at them as soon as they step on campus. They are tempted by the idea of not having to dig into their less-than-abundant cash supply to pay for things. They can just charge it.

"The convenience of credit has a very strong appeal," says Edward Roach, vice president of the Consumer Credit Counseling Services of Forsyth County. "When you don't have much cash, the buying power of a credit card can be very attractive."

Students also look very attractive to the banks, who conduct credit-card seduction on college campuses across the country. They set up their tables at sporting events and heavy traffic areas around campus, offering free hats or T-shirts to students just for signing up.

What do the banks gain from getting as many students as possible to use their credit card? The answer is simple: lifetime customers. A credit card is a good way to introduce students to the bank, Roach says. The bank assumes that when the students graduate, they will get fairly high-paying jobs and spend more money with the credit card they've already been using. The bank wants students to be comfortable with that particular bank so that after graduation, when they have more financial responsibilities, they'll want to use the bank's other services.

Meanwhile, as long as they're still in school, the credit card definitely comes in handy. If they're just buying a few things here and there, they're not thinking about the longer-term effects of their spending. If students are going out for pizza with their friends or picking up some printer paper, it's less hassle to just use a credit card than to find an ATM machine, particularly one that doesn't charge a fee, and get cash. These little expenses can add up.

The multiple-card trap
This problem gets more serious if the student has multiple credit cards. Students usually have two or three cards, Roach says, typically with credit lines of $1,800. The combination of financial inexperience, big temptations and small income can quickly turn credit card debt into a problem.

How do students end up with multiple cards and debts piling up? Students feel empowered and even flattered by the offer of credit, Roach says, and card issuers make their offers sound so appealing, the student just can't pass it up. He says students tend to justify getting a second card by telling themselves that they'll only use it "in case of an emergency." These good intentions usually don't last, and students find themselves dealing with multiple credit card debts.

Even if they don't use all of their credit cards, simply having them puts students at a disadvantage when applying for loans. Carrying several cards makes lenders nervous, Roach says, "because of the potential debt that the student could get into by charging expenses on previously unused cards."

Students rarely consider the long-term risks of having multiple credit cards and over-spending. Surrounded by credit card companies' offers in their day-to-day lives, they get taken in by the allure of credit.

The companies also know how to market their cards to students. They know where to show up, and what to do to catch the attention of a college student. They make things seem easy and free, and the student can't say no.

A fellow student of mine signed up for a Wake Forest MBNA MasterCard at a football game, where MBNA had a stand set up, because they were in the right place at the right time and had a great-sounding offer. Plus, he got a free hat out of it. He's now dealing with credit card debt on top of all his other school expenses.

"The ironic thing," he says, "is that I've never even worn the hat."


-- Posted: March 6, 2001




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