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Are Student Credit Cards Evil?
A few days ago we wrote about two Citi student credit cards that are offering double rewards for three months. In response, a reader calling herself "Wilt's Mom" wrote the following comment:
Awesome! Providing credit cards to people who don’t even have an education yet - never mind a job - is one of my top 5 favorite Evil Things Credit Card Companies Do! Thanks for promoting it DR! And thanks for helping me decide whether or not to visit your blog again!
First, let me say that I welcome contrary views. If you ever disagree with anything on the Dough Roller, please let us know. I hope you don't decide to leave for good, like Wilt's Mom, but that of course is up to you. Now back to the question at hand.
I don't subscribe to the notion that college students are unable to handle a credit card. Just like adults of all ages, some will use a credit card responsibly, and some won't. I had a credit card in college, and it helped me build a solid credit history, was a safe and secure way to shop, and helped me through a couple of emergencies. In fact, I can't imagine sending my kids away to college without a credit card.
I also don't subscribe to the notion that credit card companies are evil. I know they've been a convenient target of late, but at some point we have to take responsibility for our own financial decisions. Some of the on-campus credit card marketing was certainly over the top, but that was as much the colleges and universities as it was the credit card companies. And on-campus marketing will be a thing of the past with the Credit Card Act of 2009.
If you want my full views on student credit cards, check out A College Student's Guide to Credit Cards.
But what's your take? Did you have a credit card in college? Are credit card companies evil for offering college students credit cards?
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Excellent article. I am also a college professor and one of my first lessons to freshmen pertains to credit cards and how damaging they can be.
I got my first credit card at 18, with the help of already being in college. I only worked in the summer and I lived at home, during school my Mom paid for my expenses. (But only for one semester, I shortly took a year off and got on with my life before getting back into school.)
And you know what? At 21, I have never made a late payment. I have never carried a balance. And, just last year, I got my own rewards credit card and now I get cash back for using it. (In essence, I get paid to use it as I normally would. And I do that.) My credit card companies aren’t mean, or evil. They’re businesses. The goal of any business is to make money, bottom line. We just have a “good” relationship — They make a little money off the merchant fees generated by me using the card, and I pay them back when they expect me to.
Not everyone has horrible discipline, as DR points out. I’m endlessly amused that those who look at my credit report find it stunningly good for my age. When I got my car loan in June, the only reason my husband had to co-sign was because of the age of my credit. (Three years at this point!) If age is all that’s working against me, waiting surely wouldn’t have done me any good.
Personality should dictate whether or not someone can handle credit, not age.
I dont think the credit card companies are evil or anything. At some point we have to take responsibility for what we do, and the sooner you learn it the better it is.
Targeting minors and young adults with predatory business practices should be illegal. The fact that congress allows this demonstrates just how far corporations and banks control this country and are willing to degrade/deteriorate the social fabric of our society to make a quick buck. If they couldn’t make serious money from people under the age of 25 with predatory practices they wouldn’t be wasting their time and effort to go to such great lengths to steal from kids/young adults. It’s does nothing more for this country than create a whole new generation enslaved to the Rentier class. Think of this twisted and deregulated banking phenomenon as nothing more than counterfeiting. Printing promissory notes and treating as if it were real money printed by the federal reserve. essentially making money out of thin air.
Gen X were the latch-key kids, whose generation saw the greatest rise in parental divorce. they are pessimists and happen to be the biggest demographic consumers of self-help books. That’s a lot of depressive adults and easy pickings for predatory bankers regardless of their age bracket.
Gen Y aren’t so depressive, but they have no loyalty to anyone but corporate brand recognition and trends. Once again an entire generation of young adults and teens that are easy pickings when it comes to the vultures on wallstreet and commercial bankers.
Had deregulation of the banking system in the 1970’s not occurred we wouldn’t have the spiraling debt cloud over our nation that creates bubble economies and forces our congress and central bankers to print more money to reinflate the collapsed bubbles. (stimulus package, perpetual war spending based on lies, larger gov’t, IMF, eternal national debt that can never really be paid off, etc…).
It’s a vicous cycle that has created a brand new industry, F.I.RE (financial, insurance and real estate). Those industries have taken over the country and reduced manufacturing, and subsitence economies to a minuscule size that we used to rely on to bouy the rise and fall of the national and global economies.
So maybe some peope think it’s cool to give kids some responsibility as an adult, but it has proven disasterous in less than 30 years with no end in sight other than pushing the middle class closer and closer to the poverty line.
When I was a freshman in college I got every card I could, partied like hell, and ran them all to the max. When the collection calls started I just told them “Hey, I have no income and no assets, sue me if you want to waste your time, what did you expect giving $10,000 in credit to somebody without a job?” They didn’t bother, of course, to sue me. By the time I got out of grad school, the statute of limitations was up, and the 7 years had rolled the bad references off my credit report. As soon as I got a job I got credit easily and have never missed another payment. If they want to play this game with college kids I say play them right back.
I get more and more tired of listening to people claim that Credit Cards are evil, even for students.
Correct me if I’m wrong but students are in college because they are somewhat smart yes? Then they should be responsible enough to be able to manage their finances. It’s better to learn the hard lessons as a student rather than a father of two.
I was discussing this with my 20-year-old college student this weekend. He has had a credit card since turning 18. He pays the full amount charged every Sunday, and so has never paid interest or a fee. He also has received about $100 worth of rewards over the past 2 years. (Admittedly, he has almost always been working during this time, except a few months when searching for a new job.)
I was telling him about the new law that requires proof of income or a co-signer for those under 21, and he thinks it’s a fabulous idea! He says that, in general, young adults (especially those in college) cannot handle credit cards, and that they would be better off if they couldn’t get any. Since he frequently works with his friends and acquaintances on finance and budget troubles, I suppose he has a unique perspective based on actual experience.
Annie, thanks for sharing this perspective. It sounds like your college student is on the right track with finances. As for the law, it may indeed help a lot of people, although I cringe at the idea of the government regulating our lives as much as it already does.
I have had a credit card since I was 18 and yes it was a student card but Wilt’s mom is wrong, not all students don’t work. I was working since I was 15. Why should I not be able to get a credit card. Now at 24 my credit score is 745 and we will be buying a house soon. I HATE the credit card bill of 24.