College Students And Credit Cards

Having saturated the working adult population with credit card offers, credit card companies are now banking on a new market: college students. Under regular credit criteria, many students would not be able to get a card because they have no credit history and little or no income. But the market for young people is valuable, as industry research shows that young consumers remain loyal to their first cards as they get older. Nellie Mae, the student loan agency, found that 78% of college students had credit cards in 2000. Credit card companies have moved on campus to lure college students into obtaining cards. Their aggressive marketing, coupled with students' lack of financial experience or education, leads many students into serious debt.

Warning Signals:

• Undergraduates with credit cards carried an average balance of $2,748 in 2000. (Source: Nellie Mae)

• Half of all college students with credit cards don't pay their balances in full every month.

• 58% of college students reported seeing on-campus credit card marketing tables for two or more days within a one month period at the beginning of the semester.

• On a test of personal finance skills administered to high school seniors, students averaged a score of 57%, an F on any grading scale. Only 5% of the seniors scored a C or better.

(Source: Jump Start, www.jumpstart.org) School Zone: College Students and Credit Cards

U.S. PIRG serves as the national lobbying office for state Public Interest research groups. PIRGs are independent, nonprofit, nonpartisan consumer and environmental advocacy groups with members around the country. U.S. PIRG's website is www.uspirg.org and the special state PIRG credit card education website is www.truthaboutcredit.org.

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