The Renegade Rip

Students in hot water over credit

Micayla Elliott

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You’re trying to get your education, while working a part-time job, living on your own, buying your own food and utilities. Your student loans aren’t quite paying the costs, and that old bomb of a car your parents gave you breaks down every other day. If you’re like the majority of college students, your middle-class family can’t afford the costs of college. You’re stuck.

But all of a sudden a credit card company soliciting the campus stops you on your way to class and gives you a free T-shirt, candy bar and gift certificate, and all you have to do in return is sign up for a credit card, easy as that. You are about to become another statistic in college debt nationwide.

Tiffany Goss, a BC communications major, says she is $2,500 in debt due to credit cards.

“As soon as I graduated high school, credit card companies were practically knocking down my door trying to get me signed up,” Goss said. “Before I knew it, I was signed up on three cards and now I’m struggling to pay them off while also dealing with the cost of college tuition and books.”

Seventy-eight percent of college students have at least two credit cards and 32 percent of those have four or more credit card accounts. The average college student has a credit debt of $2,748, according to the most recent Nellie Mae study.

Chuck Wall, a BC business professor, blames credit cards for the rise in student debt.

“I think it’s unethical and immoral for solicitors to be on campus offering crazy little inducements, like a candy bar,” Wall said. “A student will pick one up just for the heck of it, use it inappropriately, default on it, then raise the interest rates for other credit card holders who do use them responsibly.”

According to a recent article in USA Today, Harvard Law School professor Elizabeth Warren, principal researcher in a national survey of debtors, said the fastest-growing group of bankruptcy filers is between the ages of 18 and 25. Last year almost half a million people in this group filed for bankruptcy.

The reason why so many students fall into the credit card companies’ hands is the snowball effect. For example, according to Katy Hudson, Education Director of Consumer Credit Card Counseling Service of Kern County, a person might owe $2,500 on a card that charges 19.8 percent interest and requires a minimum payment of $25 on unpaid balances. If that person makes no additional charges and makes only the minimum payment each month, it would take 40 years to pay off the debt and would cost more than $24,960 in interest.

Wall explained that responsible payments can prevent such debt.

“If a credit card holder is responsible and pays it off at the end of the 30 day period, they win over the credit companies,” Wall said. “But if a person lets their balance roll over, and gets taken advantage of by the interest it collects, then the credit card companies win.”

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Students in hot water over credit