Lifestyle University Daily Kansan / Friday, October 19, 1990 11 Credit CRUNCH Students find credit hard to take charge of By Courtney Eblen Kansan staff writer C campus bulletin boards are slathered with credit card applications, each one promi- applications, each one promising $1,000 to $2,000 credit limits for regardless of whether they are employed or is an easy way to pay, the ads say. While the offers are valid, there's a catch: Temptation. Dawn, a journalism student, has asked that her last name not be used in this story, for understandable reasons. She is more than $4,000 in debt. All of it, she said, is because of credit cards. Dawn said the cards she had seemed harmless at first. A transfer student from Minneapolis, she began her junior year at the University of Kansas two years ago. She had one credit card, a Teacher's Federal Credit Union card her parents gave her to use in emergencies. But Dawn discovered that many area stores refused to accept her out-of-state checks without a major credit card. When she was bombed by people showing MasterCard, VISA and Discover applications into her hands during Hawk Week, she gladly accepted them. "At first, I just did it for a game," Dawn said. "I wanted to see how many credit cards I could get." Before long, Dawn had five major credit cards and numerous others from smaller companies. After she began using one, letters came to her from other credit card companies. She said that "had already been approved" since she already held a card. So she applied for those cards, too. The credit limits on the cards ranged from $1,000 to $2,000. Dawn paid her rent, utilities, grocery bills and shopping expenses with the credit cards. She said she never blew her credit limits. Then the bills began to accumulate. And she could not find a job to pay for the things she had charged. She was unemployed for more than five months. "I didn't want to call up my parents and say, 'I can't find a job.' Dawn said. "I didn't want them to know I couldn't make it on my own." Dawn borrowed money from her boyfriend but still couldn't shake the debt. "I was just so stressed out over money," she said. "I would sit in the middle of the floor in my apartment and just cry." Finally, she told her parents, and they bailed her out of the immediate debts. But it was up to Dawn to pay for the others. "I dug myself so deep in the hole that it's going to take me three years to pay it off," she said. She pays $105 each month to pay off a $4,000 consolidation loan she took out to pay for her credit card debts. "I could be a rich woman now if hadn't gotten those credit cards," she said. Dawn has since cut up the credit cards, all but the one she started out with — the Teacher's Federal Credit Card. The teacher and friends not to apply for credit cards. The Parent Trap Dawn, who now works at a loan servicing agency, said part of the reason credit card companies focused on students was that they could be virtually assured of making a profit. "If we can afford to go to college, we can afford to pay our credit card bills." Dawn said. The card compass the two students, the students, but Mom and Dad, too. "I just knew my parents would kill me when they found out. But I knew hey'd help." So did the credit card companies she added. Credit card companies and banks have various plans aimed at students, but spokespersons for Chase Bank, MasterCard, and Discover Card said the companies did not keep separate statistics on student members, nor would they comment on how much they charged for credit cards that it was for non-students. Alicia Langston, an assistant manager at American Express' office in New York, said it was sometimes easier for students to get a card than it was for people who were not in school, or even for graduates. Students need a good credit record to get an American Express card, but they can still get a card even if they have no credit history at all. Langton said it was often a learning experience for new credit card holders. "There is always a percentage of people that go bad on their credit," Langton said. But students, are, for the most part, very capable of main- Counseling service lifts people out of debt through budgeting Kansan staff writer By Courtney Eblen To help people handle their credit crunch, Consumer Credit Services Credit Counseling Staff offers counseling and counseling one outset of the nationally sponsored organization is in Topke, and every Thursday, a representative travels to a client's home to learn how to manage their money. Kellie Thompson, a credit counselor, sees about 50 people a week who have money problems of one type or another. Their problems range from not being able to make their house payments to having outstanding credit on cards. Thompson said it was easy to fall into the credit card trap. College students, she said, are betting they will finish school, get high-paying jobs, and then pay him back. They're out to pay for their credit cards. Thompson counsels and advises people on how to get out of debt and how to budget their income so some problem won't arise again. "Many times, that debt is so to it that it forces them to quit school so they can make the payments," Thompson said. One KU graduate, who asked that his last name not be used, he said he expected his full-time job as a graphics designer to pay for a personal computer he needed for work. Brent brought the computer with his Discover Card in April. He is paying for the computer gradually, while paying the lease on an apartment he and his fiance will move when they marry in January. "it's kind of hard saving when you owe." Brent said. "You come to rely on them more than you should. They're nice to have, but you need to keep track of how much you spend." Thompson said careful budgeting was the best defense against debt. She prepares budgets that strictly allow money to each expense a client may need for one month. This allows debts to be paid off gradually. Most of them are three-year programs. "I can't be a hypocrite," Thompson said. "I'm a single parent with three kids. I'm on a phone call, we're learning about budgeting." The counseling service, also sponsored by the United Way, is confidential. Clients are often referred to the service by banks or by friends who have gone through similar experiences. The first interview with the credit counseling service costs $20, but additional visits are free. For further information about the counseling service in Lawrence, call 843-4608. taining a good credit record, she said. The specter of a permanent black mark on a credit record is an indication that they are to keep in with their payments. Like American Express, Discover Card expects payment on charges within a few weeks of the charge. A minimum rent rate is charged for late payments. Multiple debts Cherri Smith, 21, works as a teller at Valley View State Bank in Olathe, and she isn't surprised any more to her with wallets full of credit cards. "one guy came in and asked for $200 off his credit card (VISA), and it was rejected." Smith recalled. "So he just gave me another one. He probably had 20 credit cards in his wallet. It worried me when I saw all those credit cards, because I know he can't be making all his payments." Smith is in a money crunch of her own. In September, she dropped out of college to earn money to continue at KU, where she is a business major one semester away from graduation. Things seemed fine with her savings plans, until three weeks ago, when her husband lost his job. The Smiths have two credit cards (J.C. Penn and Discover), which they reserve for use only in emergencies, and only when they know they already have the money to pay their bills. "I don't even want to think about what would have happened if we'd had a bunch of stuff charged on those phones," he said. "We would have gone under." But the cards are nice to have, she said, especially when stores will not accept Smith's check without seeing a major credit card. The card, she said, has become a form of identification. Illustrations by Tom Michaud ALL YOU NEED TO KNOW ABOUT PIZZA! NO COUPON SPECIALS 842-1212 Everyday Two-Fers 1601 W.23rd Party "10" 2. Toppings Southern Hills Center Primetime Special 1. Topping 2. Cokes $8.00 1•Topping 10 Pizzas $25.00 1. Topping 4. Colors CARRY-OUT SPECIAL 1. Pizza 1•Topping 1•Coke $10.00 DELIVERY BEGINS AT 11 am DAILY $3.50 11am-M-Th-2am 11am Fri-Sat 3am 11am--Sun--1am Go Ahead Take A PEEK! 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