For some, credit cards mean buying now,suffering later
Eric B. Howell/KANSAN
Justin Harvey, Newton sophomore, takes a few minutes to fill out a credit card application. Many students say they fill out the forms to get free gifts, T-shirts and other promotional items.
By Kerry Hillard
Kansan staff writer
What began as a simple solution for lack of funds turned into an almost uncontrollable debt for Wichita senior Adri Jones.
"The first card I got was a J.C. Penney's card." Jones said. "Once I got approved for that, everybody started approving me."
One credit card became 20,
and Jones maxed out all of
them, accumulating a $3,500
debt.
"You think that you can pay them off, so you keep charging and charging," Jones said. "It's a bad decision because when you're in college,you don't want to start out with a bad credit record."
Jones said she spent most of this semester's student loans to pay the debt, which is now $1.000.
Jones got most of her cards from mail offers, but a vendor in the Kansas Union supplied her Citibank Visa card. The vendor said it was a good idea to apply for the card so Jones could establish a credit history.
Although she already had others, Jones accepted the card. She realizes now that the vendor was wrong.
"It's a good idea for the credit card companies, but not for the students," she said. "They're here to make money, not as a service."
Mitch Montagna, spokesman for AT&T Universal Card Services, said credit card vendors solicited on college campuses because credit cards were in high demand among students.
Students should choose cards based on the annual fees and interest rates. Montagna said.
People who are considered high risk will be charged a higher interest rate, Montagna
said. College students are considered moderate risk and are charged an annual interest rate of 17.6 percent at AT&T and most other cards.
Montagna said students should read supplied information about interest rates before they activated a card. A card is activated when signed and used to make a purchase or for a cash advance.
"If you don't think you can handle it, hesitate, please," he said.
Josh Brozek, Great Bend junior, filled out an application for a credit card at a vendor in the Kansas Union.
"I don't need the card," Brozek said.
However, the incentives — M&Ms, a Webster's Dictionary and a T-shirt — made Brozek consider to apply for and later activate the card.
"I've never gotten in trouble with one before," he said. "I want to build up my credit."
Credit is built by making prompt and full payments on credit cards. A credit base is important for getting bank loans.
John Hooge, an attorney who deals with bankruptcy and debt cases, said students who couldn't pay off credit card debts each month should not use them.
Hooge said he had handled cases for 20- and 21-year-olds who were going bankrupt because of credit card debts. Hooge did not blame only the students' irresponsibility and the credit card companies.
"It's a part of the whole culture," he said. "We've bought into a material aspect where we want something, and we want it now, no matter what the cost."
Every month, two or three credit card vendors buy space at the Kansas Union. Space is
sold by the Kansas Union for about $100 a day or a fee for each completed application, ranging from $0.50 to $1.50.
Mike Reid, manager of the Kansas Union Bookstore, said the vendors were allowed to solicit in the union because it produced income for the bookstores.
"The money pays for the operation of the store," Reid said. "It is money that is returned to the students through rebates or store revenues."
"Students will get the cards one way or another," Reid said.
Although some students go into debt with credit cards, Reid said it was not because the cards were offered on campus.
"It's just like a lot of other vices, only if you abuse it, it is a problem." Reid said.
In addition to the Union, campus organizations profit from credit card companies.
John Euston, pledge-class walk-out chair for Delta Chi fraternity, said credit card companies had helped his pledge class earn almost $400 for a trip.
The fraternity received $2 for each completed application.
Euston, Leawood freshman, said that most students who applied planned to cut up the card when they received it.
Regan Koch, Osage City sophomore, decided to activate the card he got from campus vendors and said he was surprised he had been approved.
"I put down zero income, $500 in savings and that I was independent of my parents," Koch said.
Nevertheless, Koch has stayed out of debt.
"I never let a bill run over," Koch said. "I've always paid it off. I can do that because I've never bought anything that I couldn't pay for with cash."
Dona Carr, Consumer Credit Counseling Services branch manager, said Koch was the exception. Most students don't use their cards wisely, she said.
Credit card companies should not be allowed to solicit applications on college campuses, she said.
"It opens the door for trouble," Carr said.
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