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