By Rachel Zabinski
It all starts with some very appealing applications in the mail or booths in the Student Center, all offering credit cards. Exciting offers such as raffles for free trips, free T-shirts and CDs are hard to refuse. Students get sucked in and soon MasterCard, American Express and Visa plastic consumes your wallet. High interest charges and uncontrollable spending become out of control, which can lead to debt by sophomore year.
“It’s such a pain in the butt, I get at least one everyday,” Cara Adams, a communications major, said.
The sign-and-spend method always seems so harmless but in actuality, it’s not. Credit cards are being offered everywhere students turn. They pad the deal with free merchandise or discounts for the first few months. The second anyone turns 18, the legal age to own a credit card, the applications start to flood the mail. This results in the possibility of receiving two or three applications a day.
“Since turning 18, my mailbox is full of [credit card] applications,” junior Heather Mael said. “It gets to the point where I just throw them out; I don’t even read them anymore.”
Before that point though, most sign and spend carelessly without thinking about the consequences of their actions.
“I’ll admit it; I have about six or seven credit cards. I usually just get them out for the free offers and then cut them up once the offer if done with,” Mael said.
Some students have credit cards for emergencies or just play money but the truth of the matter is it can easily develop into a problem. Not having the cold hard cash to use makes swiping so much easier. Watching the wallet getting thinner is more obvious than getting a huge bill at the end of the month.
“I have a small amount on each card,” Mael said. Having a small amount of money on each card does add up. There are many consequences to not being able to control spending.
Many of these consequences can follow you for life. If the piling credit card bills are not paid on time, it will lower the credit score, resulting in bad credit, which will linger. Sometime later when a checking account or a new credit card is needed, there is a possibility of being denied because of past credit problems. Too many college students resort to unlimited spending and find themselves not being able to pay the minimum payment. It’s hard for college students to see that what they do today can seriously affect the rest of their lives because debt is something that will follow them everywhere. The result is setting back spending everywhere.
“It seems like all my money is going to clothing, bars, and food,” Shannon Bennett, a freshman broadcast journalism major, said. “I don’t have much for anything else.”
Add debt into that factor and a significant social life is gone. Some students throughout the country have had to drop out of school because they were unable to make their payments.
“It’s very easy to get into debt,” senior psychology major Roberto Coman said.
Nellie Mae, a CBS news analyst, said that the average college student graduates with at least $18,000 in debt.
“Students double their credit card debt and triple the number of cards in their wallets between the time they arrive on campus and graduation,” Mae said.
“If you go overboard, you won’t have a good future and you’ll struggle with spending all your life,” Natalie Moctezuma, an undecided freshman, said.
Having a spending problem as a college student is not an uncommon situation. Unfortunately money management is not taught in school, and pamphlets don’t come with credit cards that explain how to use them. Students are only young adults and do not have much experience in paying their own bills.
“My parents pay my credit card bills,” Mael said. “Hopefully one day I will be able to pay my own bills.”
It makes spending much easier when you aren’t the one receiving the bills. Other parents find when the bills become too high its time to hand them over to you and that is when the dilemma starts.
“I owe my parents money from my credit card bills,” Cara Adams said. “It doesn’t affect me much now, but I do have to pay them back sometime.”
Starting out after college with debt is tough however, there are ways to prevent debt altogether.
Budgeting money is important. Because you have a $1,000 limit on you card doesn’t mean you should be spending all of it. Setting a weekly or monthly goal of how much you plan on spending will keep costs down.
It may also help to set aside money for certain emergencies or situations. If you have direct deposit, set it up so 10 or 15 percent can go to a savings account and the remaining amount goes to a checking account. This makes it appear that you have less money to spend than what you actually have.
“I’ve been trying my best lately to keep track of my spending records on certain things. That includes keeping receipts,” Bennett said.
Keeping receipts helps add up all your expenses conveniently. Not spending money that you don’t have will also help out.
Having a job may be tedious on top of studies and extracurricular activities, but it will help with having more money to spend. Having a steady income makes paying for everything so much easier.
Limiting yourself to two or three credit cards will also help in the long run. The initial discounts are great but it just makes it too easy to spend money in the long run. Cut up the ones you don’t use, or even some of the ones you do. Limiting you to only a few cards makes the bills easier to pay also because you won’t have as many bills to pay.
Spending problems are easy to get into the habit of, but it is not impossible to get out. Remember the next time you swipe and sign your bank account is suffering. Bad credit does follow you everywhere so use that plastic sparingly. The next time you answer the question, “Paper or plastic?”, Be sure to say paper.
One credit card can lead to another and eventually there are statements for five credit cards coming in the mail monthly. (Paul Palazzolo/The Chronicle)