They're everywhere. Paired with free gifts in Harvard Square. In bookstore bags with your textbooks. In your dorm mailbox, or even shoved under your door. They are credit card applications, and they all want you to apply. The transition to college represents a new and independent way of life, but beware: credit card companies know you're easy prey.
These solicitations, whether by mail, by phone, or in person, can be tempting. There is essentially no obligation, as most cards marketed to college students include no annual fees. With all the gifts, the deferred payments that come with a credit line, or even a feeling of adulthood, there are many incentives to fill out the short application.
And the applications are generally approved. With no prior credit history, students don't have to worry about past mistakes that could get them rejected. Creditors also know that students, equipped with various degrees, will be in the job market after a few short years, so their temporary unemployment isn't so important.
With over 15 million students nationwide, the college market is no stranger to card companies. According to Nellie Mae, a major national student loan provider, 67 percent of undergraduates had credit cards in 1998. Last year, the number was up to 78 percent.
And Nellie Mae estimates the average debt of card-holding undergraduates at $2,200. The data is unclear on how much of a strain this actually puts on students' finances, since many receive regular income from parents or other relatives.
There are no official statistics on the personal finances of Tufts undergrads, but some say that students receive help from parents through allowances or parental charge cards. "I feel like most people at Tufts use their parents' credit cards," one female junior said.
As more and more college students sign up for credit cards, the companies are finding better and better ways to hook them in. The reasoning of the credit card companies is similar to the lucrative offers auto creditors extend to recent college graduates. By establishing "brand loyalty" among younger customers, companies say, students are more likely to stick with them.
But students aren't the only recipients of credit card incentives, universities also get bonuses from card companies for campus publicity, such as inserts in bookstore bags and tables around the campus center.
Some students believe that credit card solicitations are not the root of the problem. They feel that poor financial planning among undergraduates, such as charging more than they can afford or only making minimum monthly payments, is to blame for mounting credit debt.
"I think credit cards are a horrible idea," junior Abigail Pratt said. "If you don't have the money to buy something, you shouldn't be spending it."
Others are less critical of the cards, but only if the user has a constant job or a steady income.
"What if you really need something, and you can count on a paycheck?" junior Jackie Lester asked.
But students that get into credit problems have just as many concerns as anyone in the working world - in fact, they might even have more to worry about. Bad credit can prevent students from being able to buy a car, take out a loan, or purchase a house after graduation, and the typical student's limited credit history means there may be no good credit to fall back on.
While credit card companies are busy enticing college students with free gifts and special offers, they're also trying to crack down harder on their nonpaying customers. Congress is currently considering the Bankruptcy Reform Act, a product of intense lobbying by credit companies that's backed by the Bush administration, which would make bankruptcy relief from credit card debt tougher to come by.
"Credit card companies want to have it both ways," Harvard law professor Elizabeth Warren recently told the Milwaukee Journal Sentinel. "They want an unregulated market so they can target anyone, no matter how young or inexperienced. Then on the flip side, if someone gets into financial trouble, they want the government to jump in and squeeze consumers harder to make them pay."
The issue of allowing credit card companies to solicit on campus is heavily debated at some schools. Colleges struggle to balance their concerns for student welfare with the financial implications, which can include generous payments to the school, of allowing the use of their space for such purposes.
According to Director of Student Activities Jodie Nealley, the campus center is off-limits to credit card companies. "[The] campus center does not bring in any vendors who 'sell' services - this includes credit cards," Nealley said. "The basis for this decision is based on the feeling that we should only provide vendors who sell things and not a service a student may or may not really want for the length of a binding agreement."
If students want to make sure not to charge things they can't end up paying for but are looking for the convenience and portability of a credit card, debit cards are a typical alternative. These cards are linked to the user's checking or savings account, and deduct charges from the account immediately at the point of sale.
"I wish I could use a debit card for the rest of my life," Pratt said.
Sophomore Dan Peres feels that college students should have no problem handling a credit card account. And owning a card provides unique benefits - a solid credit history can make borrowing money much easier in the future. "They're fine as long as you don't overcharge," Peres said. "As long as you don't view it as imaginary money."
