Credit cards popular among college students
May 1, 2012
Whether you're paying for your college education on your own or depending on help from grants for parents, scholarships for mothers, single mother scholarships or other financial aid, odds are you have a credit card.
Although most students don't finance their education using credit cards, a recent study conducted at five different campuses throughout the country revealed that as many as 70 percent of college students have a credit card.
The study, an academic paper titled, "Financial Literacy and Credit Cards: A Multi Campus Survey," also found that misuse of credit cards is common among those in college. Researchers discovered that just 9 percent of students paid their balances in full each month. Additionally, most students lacked knowledge about their interest rate, late fee charge and other penalties they may be charged for.
"In America, credit cards on campus have been a disaster, leaving students buried in debt before graduation, often with little hope of paying off the debt before high fees and interest double the amount," the study's authors stated.
A separate study also found that credit card companies continue to target college students, despite a 2009 law that banned them from aggressively marketing to students. University of Houston Law Center professor Jim Hawkins says that the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 has had little impact on campus.
Taking effect in February 2010, the CARD Act was designed to prevent student over-indebtedness, to end aggressive marketing to college students, and to reveal and change avaricious agreements between credit card issuers and colleges.
Professor Hawkins' study found that 68 percent of students under 21 reported receiving credit card offers in the mail, despite the CARD Act. In addition, 40 percent of students reported seeing credit card companies giving gifts to students while the act was in effect.
"Most troubling, students are still qualifying for credit cards without demonstrating an ability to repay the debt," Hawkins said. "My study found that 27 percent of students who were applying by themselves for credit cards listed loans as part of their income to qualify for the card."
While many busy college students may depend on credit cards to help them make ends meet while they're pursuing a degree, experts say there are ways to ensure you don't amass major credit card debt. According to Fox News, students should shop around for the best credit card deal, read the fine print and only charge what they know they can pay back immediately.
