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Many College Students Drown In Credit Card Debt
Average Student Has $2,700 Credit Card Debt By Graduation
Updated: 2:34 p.m. EST November 18, 2003
LANCASTER, Pa. -- Credit cards were originally designed for people with incomes, but these days, plastic is almost being handed out on some campuses, and that means some students could be handing over their financial future before they even start their career.
Most first-year college students have already heard the pitch.
"I know for me and several other people here, we get constant phone calls from different credit card companies trying to ask us and tell them their policies and tell them they are free," freshman Jamie Shanker said.
"You know, I don't have enough money to get a credit card yet. I'm not interested and I don't think I'll be interested until I have a stable job or I graduate or a few years before I graduate," freshman Daniela Beck said.
According to the student loan servicer Nellie Mae, 78 percent of college students have plastic by the time they get their diploma, and 32 percent of them have four or more credit cards.
The average student leaves college with more than $2,700 in credit card debt. That's separate from any college loans they may have.
Four years at the Philadelphia Bible College left Yvonne Weiss with some great memories and a laundry list of credit card debt that forced her to seek credit counseling.
"I was just trying to make the minimum payments and getting a lot of collection letters, cause I couldn't make the payments," Weiss said.
Weiss remembers the steady barrage of credit card offers at school and how easy it was to get into debt.
"It was more thinking about the moment and not thinking about what was gonna happen in the end," Weiss said.
Some colleges across the country have banned credit card marketing, but it's big business for others. Oklahoma has an exclusive $10 million deal with Visa to market on campus. The University of Tennessee has a $16.5 million credit card deal.
"I think the credit card companies have done more research on our kids than we have, so they're getting them when they have the least amount of information about credit cards, finances and things like that," credit counselor Mike Sprunger said.
Sprunger said he's seen students who have had to drop out of school to pay off their credit cards, and they've done some serious damage to their financial future.
"They're really at the beginning curve of their lives. And so a lot of major financial transactions await them in the future and they're putting all those in jeopardy at the moment," Sprunger said.
Protecting your child's financial future begins long before they go off to college. Educate them early about the dangers of credit cards and help them to make a choice on limits. If they're going to fail with a credit card, it's better to fail with a card with a limit of $500 than one with a $5,000 limit.
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