As a student, I remember being bombarded with solicitations for student credit cards when I walked through the quad. Credit card companies would shower us with umbrellas, sweatshirts and free giveaways. The banks were trying to lure new applicants for student credit cards and it worked. It was an effortless sell and it appeared that anyone would be approved. I did not know one person who was denied. Yet I knew plenty of people who only paid their minimum balances each month and kept ringing up additional purchases on their cards. You can see why it was an easy sell. It was like free money during a time when most of us had little. With credit cards we could be wild and free. Oh, the places we could go. The amount of debt we could ring up.
There has been a lot of discussion within campus administrations and the government recently about marketing strategies regarding student credit cards. The main concern about the mutually beneficial contracts between universities and banks is that that rely on students opening new credit card accounts and maintaining balances on them. Students are a vulnerable lot. Most are strapped for cash and are experiencing more freedom and independence than ever before. Handing out student credit cards to young people who may not understand the long term effects of debt is not the noblest undertaking. A U.S. PIRG study released last March surveyed college students and their credit card habits. The freshman that were surveyed carried an average $1300 balance on their student credit cards, and seniors carried a $2500 balance on average. A late fee had been incurred by about 25 percent of those surveyed. 5 percent of the students surveyed had been so behind on payments on a card that it was canceled.
Banks who offer student credit cards claim they are doing so responsibly. They say having a credit card allows students an opportunity to budget and establish a relationship with a bank. Banks say the results of the U.S. PIRG survey paint an exaggerated picture of the spending habits on student credit cards. Other studies indicate that a mere 30 percent of students actually have credit cards and the average balance carried is less than $500. Many credit card companies are now offering free seminars to help students learn to budget and manage their finances responsibly. They believe there is a role for student credit cards in the financial development of students.
University administrators do not want to ban student credit cards from campuses. They just want to protect their students from any exploitive marketing practices. If they are used appropriately and with an understanding of the long term effects of debt, student credit cards can provide students with a sound and dependable financial resource.

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