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No Credit Card Debt at Graduation: Priceless

No Credit Card Debt at Graduation: Priceless

The Student Life via UWIRE

September 17, 2009

Owning at least one credit card has become the norm on college campuses. Nevertheless, credit card ignorance continues to exist at universities throughout the nation.

Credit card companies have historically targeted the college-age population.

“Credit cards are extremely useful for younger people,” business professor Glenn MacDonald said. “They solve a problem younger people have.”

Among these problems are access to liquid currency and a desire to develop a positive credit history for the future.

“Credit cards are useful to young people for a couple of reasons,” MacDonald said. “You’re at that part in your life where you are earning less than you will earn at any other time. Your money comes in at irregular times. Credit cards help alleviate these issues.”

In an effort to further tap the college student market, credit card companies have resorted to offering T-shirts, water bottles, food and other items in exchange for students filling out a credit card application.

Research has found these tactics to be successful. One study showed that in a sample of 1,500 students, two out of three students were enticed to sign up for a credit card after receiving free merchandise.

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Last year, the United States Public Interest Research Group spearheaded the “Truth About Credit” campaign to educate college students about credit cards.

The campaign found that many of the offers given to college students have one thing in common: enticing low to zero preliminary interest rates that quickly rise to as much as 24 percent once the trial period ends.

In addition, another study found that more than half of college students in the United States signed up for at least four cards and accumulated an average of $2,500 in credit card debt by the time they graduated.

Despite news stories all over the nation highlighting credit card ignorance on the part of college students, students at Washington University seem to be responsible credit card holders.

“Students do not seem to have trouble managing their credit,” said Bill Witbrodt, director of Student Financial Services.

Student sentiment is similarly positive.

“I would say [the student body’s financial knowledge] is probably above average for a group of people of the same age range,” sophomore Dan Flaherty said.

Since most credit cards offered to students have very low credit limits, most students do not accumulate a great deal of debt.