Credit card companies have pushed their marketing initiatives to focus one specific demographic: the college crowd. Our mailboxes are flooded with advertisements for low interest credit cards. Solicitors walk around campuses telling us about the great deals their credit card company offers. And when we can’t be reached on campus, the mail finds its way to our permanent address.
The marketing strategy seems to be working. According to a study by the Education Resources Institution and Institute for Higher Education Policy, 64 percent of college students have at least one credit card.
With the large number of offers, and free T-shirts, out there, students should read contracts with a scrutinizing eye before signing up for a credit card. Rarely do good deals and low interest rates last long. If an offer for no annual fee and low interest lasts only one year, it won’t be long before a student can end up in debt.
Credit counselors at Consumer Credit Counseling Services for the Greater Washington Area (CCCS) help people who have accumulated large amounts of debt. Phyllis Westhall is a credit counseling officer who helps people of all ages with credit management. She understands the problems that attack college students.
“Students fail in their credit management because they haven’t been educated on fiscal manners,” Westhall said. “No one teaches young adults how to watch their spending and how to properly choose a credit card. It should be part of their schooling.”
Choosing a credit card is like making an investment, she said. Westhall suggests using the internet to find offers and recommended Cardtrak.com as a resource.
Westhall offered examples of how fast debt can accumulate when student pay just the minimum balance on a credit card.
Westhall said college students should try to bank at credit unions because of the services they offer.
Despite all the credit card choices on the market, college students are learning to manage their finances in hopes of staying out of debt. Credit counselors still stress the need for students not to have a credit card but see nothing wrong with using a credit card for an emergency.
Westhall said student loans offered by the U.S. Department of Education are the best way to stay out of debt.
A National Post-secondary Aid Study reports that 54 percent of students attending four-year undergraduate private institutions nationwide borrowed an average of $14,290 in 1996, according to the American Council on Education. This is the most recent nationwide study conducted.
The Office of Financial Assistance at GW offers several types of loans, scholarships and federal aid grants for students who need assistance. They also offer bank loans and recommend Citibank’s CitiAssist loan. It offers interest rates between 5.5 and 6.5 percent, but rates vary by loan and year.
Students can take out loans to get money for tuition, room and board, books and living expenses. More information on deadlines and eligibility can be found on the Web at Gwired.gwu.edu/finaid.
“A college student should finance anything on a student loan,” Westhall said. “It is easier to pay off a student loan because of the low interest rates, and you can arrange a deterrent on a student loan.”
-Salma Khalil contributed to this report.
