Charge Now, Think Later

The first week of college can be like a carnival. There are people and vendors everywhere. You can buy purses, candles, jewelry, musical instruments, posters, handmade art, and food. You can sign up for sororities and frats, join clubs and sign petitions. You can buy local newspaper subscriptions and sell used textbooks. Mixed in with all of this are the credit card solicitors. They have pounds of M&M's, and t-shirts flowing from their boxes. They give away soda and pizza. They have games and giveaways and they almost always draw a crowd. But they're too busy asking whether you want a large or an extra large T-shirt to say anything about interest rates or fixed APR.

I am pretty good with money and I don't buy much. President Bush wouldn't approve. Okay, so I have a CD habit, but I keep it under control most of the time. I pay a lot in rent, but I try to balance it by keeping the grocery bill down. So I was shocked when I sat down to add up my debt.

I just graduated college and I have to start paying back my student loan soon. Well how, I keep thinking, am I going to be able to pay off $15,000 when I can never seem to get my credit card balance below $1,000?

It's official. I'm a statistic. But I'm in good company.

Handing Out Plastic

The average college student will graduate owing over $15,000 in student loans, and nearly $3,000 in credit card debt, according to federal statistics. In 2000, 78 percent of US students had at least one credit card, according to major student loan provider Nellie Mae. And many college students now have three or four.

It hasn't always been this way. Going to college and getting a credit card didn't used to be this easy. In the early 1980s credit card companies discovered the college market. A 1983 article that ran in the New York Times quoted experts who advised college students to start earning credit through smaller cards like the kind you get through a department store. By the middle of the 90s, however, Visa and MasterCard were directly targeting college students. In 1995 The Los Angeles Times reported on Generation X's credit problem. The average debt for student loans alone has gone up $5,000 since then. The problem is snowballing.

Isn't it good to have a credit card before graduating? you may be asking. Yes. Using a credit card to make small purchases and then paying the balance in full is a good way to start a positive credit report, which will later be used and viewed when you apply for jobs, apply for loans, buy a house or a car, or apply for more credit cards. Good credit history is smart spending. And it is very hard to get a credit card after you graduate if you do not already have one.

The problem is that credit card solicitors don't ever stop. They offer interest-free balance transfers, send checks in the mail, and extend your line of credit. But they still expect you to pay. My credit limit has been raised twice since I got my card five years ago. I get at least three credit card offers in the mail every week and probably ten times that many over email.

	Legislation can stop some credit card companies from soliciting on campuses, but it cannot stop students from spending.

So now you're a college student making nothing, or maybe you have a job, but you have very little spending money. You have a credit card or two with $5,000 limits on each and that makes life a bit easier, until the bills come.

Not paying those companies can ruin your credit. A bad credit report can stay with you for over seven years, longer than most of the stuff you bought with your card. Paying the minimum balance each month only makes the pain last longer because you're stuck paying as much as 20% interest.

Some students have dropped out of school to pay off their debt, delaying their education and their hoped-for careers. When you're young and broke, this can feel like a big dead end. In 1997 a freshman at the University of Central Oklahoma hung herself in her dorm room. Spread around her room were bills and her checkbook. She owed $2,500 to her credit cards and had just lost her part time job.