Credit cards 101

Lutheran, The, Oct 2001 by Hendricks, Kristen

College life. Friends, books, late nights, pizza delivery... and credit card solicitors. Those solicitors are fast becoming a concern on college campuses. "A lot of credit card companies want to solicit in our post-office lobby," said Don Miller, director of student activities at the ELCA's Capital University, Columbus, Ohio.

"We've cut down on the number because we knew that it wasn't healthy for the students. A lot of students sign up to get the free T-shirt or water bottle-and think they'll never use the card. Then they get it in the mail, and it's convenient so they start to use it."

A congressional report by the U.S. General Accounting Office showed that the majority of students enrolled in a four-year college have at least one card. More than one-third had cards before entering college and 46 percent got one their first year.

"In the past five to 10 years, the number has exponentially increased because it's an easy market for banks," Miller said.

And while the report cited two nationwide studies that said most students pay off their monthly bills in full, some don't--or can't. Miller recalls one student who had to withdraw for a semester to pay off a credit card bill.

"The fastest growing cohort of bankruptcies is the under-25 age group," said Steven Soderlind, associate professor of economics, St. Olaf College, Northfield, Minn. "Credit companies want students to use credit cards like loans. It becomes a way of life."

Soderlind advises parents: "Teach [your kids] to live within their means."

Students don't have to fall into a mess of credit card debt. Miller offers several tips: "Parents and students should sit down together, create a respectable limit and talk about what credit means. Parents should also assist them in getting a card through the parents' bank before the student comes to college. Often companies that market to students have huge interest rates."

Miller also said students should shred pre-approved card offers instead of simply throwing them out to protect against identity fraud.

While there can be hazards, having a credit card can be an advantage-it builds credit and allows a student to pay for unexpected expenses like car repairs.

For three years, I ignored all mail offers. But now I have a credit card. I had to get one--so I could travel on assignment for The Lutheran.

Kristen Hendricks

University of Missouri, '02

Summer intern The Lutheran