University to inform students
about credit cards
By Tangra Riggle
Staff Writer
Receiving a free T-shirt for filling out a credit
card application may make it the most expensive item in your closet.
"I maxed out three credit cards my freshman year.
I owed over $12,000," recalls a sophomore in the School of Liberal Arts.
"I don't really even know what I spent it on."
 Despite
their lack of existing credit and substantial income, college students
have become the target of credit card companies.
Flora Williams, a professor and accredited financial
adviser for Purdue students, has conducted extensive research on Purdue's
campus regarding credit card debt.
"College students are an extremely profitable market
for credit card
companies," Williams said, "but the convenience
of a credit card is all too often a curse. Students are destroying themselves."
According to the study Williams conducted on Purdue
students, she found that more than 50 percent of those surveyed said
that their credit would affect their job offers after graduation, and
more than 30 percent said that they would have to get a high-paying
job to start paying off their credit card debt.
"When students sign up for credit cards, they are
getting a lot more than a Frisbee or a coffee mug," Williams said. "Students
can apply for credit cards without jobs or income and you have to ask
yourself - what's the catch?"
According to the Public Interest Research Group,
common campus credit card rates are very high, even higher than industry
average. The group also reported that more than 60 percent of students
responsible for their own bills obtained credit cards from marketers
on campus, and, as a whole, had higher unpaid balances.
Tony Hawkins, the dean of students, said that Purdue
is planning to take steps to curb student credit debt.
"Education, notification and awareness are the
keys to avoiding bad credit," he said.
According to Hawkins, Purdue will soon include
in students' tuition bills information cautioning students about credit
cards.
Purdue isn't the only university taking steps to
combat credit card debt. According to a recent article in the Chicago
Tribune, Indiana University has now made a credit card debt seminar
a regular part of their new student-parent orientation.
"This is a terrible thing," said IU administrator
John Simpson.
"We lose more students to credit card debt than
academic failure."
The Public Interest Research Group recommends several
things that college administrators can do to prevent credit card debt
on campus.
The group also advises students with credit cards
to be aware of some key preventative steps in staying out of credit
card debt.
• Students only need one national credit card
in order to build a credit record.
• Pay as much as you can afford. Paying the
minimum balance on a high-interest credit card only hurts you.
"The minimum balance is usually only 2-3 percent,"
Williams said.
"Students don't realize that unless they pay off
their card each month, a $10 pizza becomes a $30 debt."
• Shop around. Be wary of student plans and
interest rates - are they higher than their current regular rates? Watch
for "teaser rate deals", where interest rates jump way up after three
months.
The importance of good credit and responsible credit
card use may not only impact student's current financial stability but
their future as well. Home mortgages, car loans, insurance companies
and even employers turn to credit reports in making decisions.
"Good credit is critical to success," Williams
said.
"What students are charging today may affect their
chances tomorrow."
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