hilltopics Images People Features 6A
Friday, September 15, 2000
for comments, contact Clay McCuistion at 864-4924 or e-mail features@kansan.com
Convenience of credit cards tempts broke college students to accrue debt, pay interest
By Mindle Miller writer@kansan.com Kansan campus editor
on DeLeon dreads opening his mailbox each day.
He's afraid he might find what he knows is inevitable — a stack of credit card bills.
DeLeon, a Spring 2019 graduate who has three major credit cards, said the spending habits he picked up as a student are costing him now.
He's not alone. Thousands of college students plunge into credit card debt each year. The average undergraduate student carries 3.2 credit cards and $1,843 in debt, according to Nellie Mae, a national student loan provider. Graduate students average six credit cards and $5,179 debt.
Detect chats gigs up over the Internet with a credit card," he said. "I just start browsing and seeing stuff that grabs my attention. It's on-the-spot — kind of impulsive."
DeLeon charges up most of his debt online.
The 23-year-old logs on two or three times a week to buy baseball and football tickets and to order shot glasses to bolster his already large collection. His latest cyber-shopping spree has focused on sports memorabilia.
"I can say, 'I don't need this,'" DeLeon said. "But it's called temptation, and temptation always wins. Half the stuff in my apartment I don't need, but it just looks so good."
He admits his spending tirades are frivolous.
Phyllis Harrison, a credit counselor at the Topeka office of Consumer Credit Counseling, said college students were particularly prone to accumulating debt.
Plastic free for all
"You've got a lot of college students who are having to supplement their income with a credit card," she said. "It starts off very innocent, and I think it just snowballs before they realize what's happened. Most college students start out thinking the card is for books, but it ends up being for pizza, beer or parties."
DeLeon said he had good intentions for his credit card.
For better or worse, credit cards aren't hard to come by. Web surfers who apply for credit online can be approved almost instantly. Students constantly find offers stuffed in their mailboxes or lurking in their shopping bags when they buy textbooks.
"I thought it would be a good security blanket," he said. "But that blanket has been lit on fire — it's en fuego—and it's out of control."
Brenda Selman, associate registrar, said the University could not legally release students' names under Kansas law, but that credit card companies had other ways of reaching students. The University phone book is readily accessible, Selman said, and many companies partner with student organizations and set up tables to do solicitation.
Lindsey Bosilevac, Overland Park freshman, started getting credit card offers in the mail three months ago — after she was accepted to the University but before she moved out of her parents' house.
Bosilevac sat on Wescoe Beach last Friday, filling out an application for an AT&T Universal Card. Pop music drifted from a stereo at a booth that promised $50 in free gifts just for completing an application. Bosilevac took the bait.
they pre-approved students.
"If there's no bad credit or no credit, they say, 'We'll take a chance,'" she said. "And they get lucky that the majority of the people will pay and will pay the interest. It's a billion-dollar-a-year industry just in interest alone."
"I have 40 minutes between classes ... and there's free stuff," she said. Often, students without a job or credit history discover they've been pre-approved for a credit card. Harrison said companies gambled when they pre-approved students.
Chancy convenience
Part of the allure of credit cards, DeLeon said, is that they are almost universally accepted.
"I don't carry any cash anymore because I know all the places will accent credit cards," he said.
accept credit cards, the sales That ubiquitous acceptance carries over into the online world — a venue that Harrison said was particularly appealing to college students.
"It's a generation that's more technology oriented," she said. "They grew up with computers at home and in school."
Whether charging online from the privacy of their apartments or edging toward their credit limits during mall shopping excursions, students risk plummeting into financial woes if they lose sight of their pri-
offers:
Harrison said that for a cardholder making the minimum payment — $10 to $15 — on a balance of $2,000 at 18 percent interest, it would take eight to 13 years to pay off his or her debt. And if the cardholder misses a payment, Harrison said, the late fees often put them over their credit limits.
orities.
"There's no cap in Kansas," she said. "So usually, when you miss a payment, it's an open door on the credit card to jack up your interest. Companies used to close those accounts out. Now they leave it to where you can continue to charge, and you continue to get an over-limit fee."
Credit card companies have tried to make it convenient for e-shoppers to manage their accounts online. DeLeon is able to make payments, check his balances and view recent activities — all from credit card Web sites.
To prevent debt, Harrison said students should read the fine print and be sure to get cards with low credit limits and low interest rates.
be sure to get cards from DeLeon is trying to use his credit cards less, and he's slowly working his way out of debt. But he still gets a charge out of his virtual shopping spree.
"Plastic is my new best friend," he said.
Tips for avoiding credit card debt
- Use the card for its intended purpose — usually emergencies.
- Don't carry the card with you at all times — it's too tempting.
- Get a card with a low credit limit. If the company tries to increase the credit line, ask them not to.
- Shop for a card with a low interest rate.
- Find out the amounts for late fees and overdrawn charges.
- Estimate your credit capacity. You should not be spending any more than 15 percent of your total income on car payment, credit cards and other debt.
Source: Phyllis Harris of Consumer Credit Counseling