Think twice before you get a credit card

The Oklahoma Daily
Staff Column
Jennifer Fischer
November 05, 2004

The machine clicked a series of times before the cashier looked up with a smile and handed back the Visa to the student a head of me in line, a grand total of $198, which, of course, will be paid over the next few months with interest. The combination of lifestyle adjustments and financial freedom has caused students to take a less conservative view of credit card spending. The concept of “buy now, pay later” has in recent years gained popularity and accessibility to college students. This surprising increase is not so surprising when you look at the overwhelming push by credit card companies on campuses like The University of Oklahoma and all over the nation.

Passing by a booth with free school supplies would turn any college student’s head, especially those who need the extra pens and paper or just want the extra goodies. These are exactly the types of people who are targeted by the credit card companies. They have come into every major college and set up shop. Specifically and unfairly targeting students by luring them in with a free vacation offers or a free t- shirt and mug.

The game being played, it seems, is attracting students while they are young and vulnerable and owning them for life. The credit card companies unfairly target students at an age when money is scarce and a change in lifestyle usually occurs, thereby limiting future financial options. From Abercrombie sweatshirts to tuition payments, there seems to be countless ways to spend massive amounts of money in four short years. Paying for all of it quickly becomes a problem for the average student. The idea of buying now and paying later seems to be a very attractive option and a solution to many problems in the short run. So now that you are the cutest girl or guy at OU and your education is well on its way to being paid for, what do you have to look forward to but enormous debt when you graduate? I think the solution to the problem is found in a number of ways:

First, education on the effects of being in debt and how to responsibly handle money.

Secondly, limitation of advertisement and the money available to young adults should be a requirement for the first few years of credit use.

Lastly, what happened to just using plain old cash.

If you don’t have enough cash, don’t buy it. Self-control is a discipline that must be learned among college students and the earlier the better. Debt causes huge problems later in life, such as divorce, not being able to own you own home and mostly it causes massive amounts of stress. So, think twice before you sign your money to a credit card agency. Hey I am not one to encourage spontaneous buying, but if you really want that new T-Shirt or whatever they offer, just go buy it, in the end I think it will be cheaper than having a credit card.

If you already have a credit card, pull out the champaign and celebrate as you cut it in half!

NIU provides counseling and legal assistance for students who have credit card debt.

Seventy-five percent of 589 college students surveyed by Penn State researchers admitted they had credit card debt.

Though NIU students were not included in the survey, it is common for students to get into credit card debt and come to the office, said Lynn Richards, assistance director of the NIU Student Legal Assistance office.

There are a few different reasons why college students get into credit card debt, Richards said. Students do not realize paying the minimum amount will get them into debt and most students don’t have much income.

They should work on a cash-only basis - necessities should be first and then students can look for other things to buy, she said.

Some students do not know that $10 in two year’s interest can be lot of money, Richards said.

Credit card companies don’t tell students about penalties and other fees, she said. Then, the payments students start making are for late fees, not for the debt itself.

Debt consolidation companies are not a good option because these companies add more charges for services, Richards said. Non-profit companies also charge for each check they write, she said.

Students can also try to negotiate with their credit card company.

Sometimes, these companies can stop adding fees for six months, so the student can spend less by having an agreement with the company, Richards said.

“Have a realistic budget,” she said.

And discipline is another main thing, said Doug Clinton, NIU associate accountancy professor. Students have to pay off their balance.

If a student does not pay $1,000 debt in two years - on 21 percent interest - this student will have a debt of $1,516, Clinton said, aside from any fees and extra charges.

However, there are compulsive shoppers who cannot stop - and besides legal help, they also need physiological treatment.

The NIU Counseling and Student Development Center helps students with the physiological part of the issue if the student is going through depression or cannot study because of the debt.

Problems can be avoided if the student knows how to live on a budget, Richards said.

Students who need any legal assistance can make an appointment by calling 753-1701 or stopping by the office on the sixth floor of the Holmes Student Center.

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