News

Plastic money, real debt

On any given day, students passing through the Breezeway can walk away with a new credit card-and a financial debt waiting to happen. Credit card companies are bombarding millions of students across college campuses each year, setting up tables with free giveaways to entice college students to sign up. But if students don’t read the fine print, they might graduate with more debt than just college loans.

“Most students are still under the umbrella of their parents,” Michael Cook, member service representative at UM Credit Union, said. “They don’t understand the ramifications of their actions. They don’t know how hard it is to rebuild their credit after it has been ruined.”

According to a 2004 study in credit-card usage among college students conducted by Nellie Mae, student loan provider, 76 percent of undergrads have a credit card. On average, college students have a debt of $2,169 and only 22 percent report paying off their cards each month.

For the remaining 78 percent, the numbers add up to one thing-debt. Fortunately, there are many preventive measures students can take.

“I would advise the UM students to join the credit union,” Cook said. “In fact, they don’t have to join this credit union. Any financial institution where someone will sit down and explain how credit works [will do]. Someone who sets up a table and wears a Bank of America t-shirt might not be who they say they are.”

Although credit cards can be a great way to build credit for when students need to take out loans or rent their first apartments, they must be used carefully. Misuse of credit cards, including late payments or no payment at all, may lead to consequences that stay on cardholders’ credit reports for years. In the case of a joint account, the main cardholder’s credit suffers if the secondary holder doesn’t make a payment on time.

Angela Castillo, senior, said there are two sides to the issue, a good side and a bad side. “The good side is that the cards help students to establish their credit,” she said.”The bad side is that some students are unable to maintain their spending and most often their parents are left to pay off their debt.”

Another problem is identity theft, when someone steals cardholders’ information to get credit at their expense. According to the Federal Trade Commission, 18- to 29-year-olds are hit the hardest.

Senior Tehmina Beg believes that college students are being targeted.

“I think [credit card companies]are using us,” she said. “Why should we spend money that we don’t have, especially when we have all these school loans to pay off?”

Others think that credit cards are fine, as long as students don’t get carried away.

Christine Cervellieri, junior, said she does have a credit card and she believes credit cards are great for students. “If students are able to stay on top of things and aren’t willing to let themselves fall into thousands of dollars of debt, they should be o.k.”

Judith Hudson can be contacted at j.hudson1@umiami.edu.

September 23, 2005

Reporters

The Miami Hurricane

Student newspaper at the University of Miami


Around the Web
  • Miami Herald
  • UM News
  • HurricaneSports

The University of Miami got off to a dream start, but could not hold on against No. 1 and defending ...

March is just around the corner; and University of Miami basketball coach Jim Larrañaga wants his pl ...

Erykah Davenport always hated being The Tall Girl. Every class picture, she was in the back row, tow ...

A little more than two years ago, Larry Scott was serving as the Miami Hurricanes’ interim head coac ...

The college basketball world woke up Friday morning to a bombshell report by Yahoo Sports detailing ...

Student a cappella group BisCaydence wins quarterfinals and advances to the next round in the intern ...

A closer look at the University of Miami's executive vice president for business and finance an ...

The popular Christian minister preached to more people than any other evangelist in history. ...

A vigil on the University of Miami campus, organized by UM students who graduated from Marjory Stone ...

The latest speaker in the popular lecture series at the Rosenstiel School, Jeff Goodell, shared insi ...

Lonnie Walker IV's three with 2.4 seconds left propelled Miami past BC at the Watsco Center. ...

The two-time defending ACC indoor champion Miami women could not make it a three-peat on Saturday, b ...

Kevin Arreaga's bronze medal in the men's weight throw led the Canes on Friday in Clemson. ...

No. 24 Miami got off to a dream start but could not hold on against No. 1 Florida Friday night, fall ...

The Hurricanes were momentarily slowed down by the first rain delay of the season, but held the Coug ...

TMH Twitter Feed
About TMH

The Miami Hurricane is the student newspaper of the University of Miami in Coral Gables, Fla. The newspaper is edited and produced by undergraduate students at UM and is published weekly in print on Tuesdays during the regular academic year.