Senior Billie Jo Backert applied for her first credit card during her sophomore year.

“I’d been thinking about getting a credit card, and one day there was this guy roaming around J Street, soliciting students,” Backert said. “I filled out an application, he gave me a T-shirt and in a few weeks I got my card in the mail.”

After missing several payments while home for the summer, Backert said her minimum monthly charge went from $50 to $638 per month. She canceled the card and got her parents to help pay off the debt.

“My credit is horrible now,” Backert said. “I can’t get a loan or an apartment. Eventually, I’ll be able to get another credit card and I’ll just have to start building good credit again.”

Backert’s experience is not uncommon. A random sample of George Mason University sophomores, juniors and seniors conducted by professor Robert Manning this year found that 75 percent of respondents had maxed out at least one credit card.

A report issued by the Senate banking committee last month also revealed that 44 percent of college students carried a credit card balance in the 1999-2000 year. Among these students, the average credit card debt was $3,066. The report called for credit card companies to fund financial education programs so students can better understand the risks of debt.

“Now that young people are spending more, marketers are making credit cards more appealing and easy to obtain,” said Don Blandin, president of the American Savings Council, a coalition of public and private financial institutions.

Credit card recruiters often set up tables in busy areas around college campuses and offer free gifts to students who fill out applications.

“You can be sure when a creditor offers you a free gift that you’ll end up paying for it before the end of the transaction,” said Law School professor John Spanogle.

Researchers testifying before the Senate said the trend might affect college retention rates as students are forced to drop out to pay off debts. After that, college graduates with bad credit may have difficulty getting approved for loans or mortgages.

“We have students come in who graduated five years ago but are still paying off spring break trips from college,” said Joanne Kersetter, president of the nonprofit group Consumer Credit Counseling Service. Kersetter’s group is one among many trying to prevent student debt.

“Universities should know just how many people are soliciting around campus and understand the terms these companies are offering,” Kersetter said.

Student credit trends vary across the country. In California, officials have prohibited credit companies from offering free gifts to students at state colleges.

Some groups say the solution to the national problem lies in educating young people in financial responsibility before college.

“The problem in this country is that personal finance is rarely taught in grades K through 12,” said Dara Duguay, executive director of Jumpstart Coalition, a group trying to increase financial literacy among young people.

“If you’re a college-bound student and didn’t take a business elective in high school, you are coming out with no knowledge of financial management,” she said.

“I got a credit card to establish credit,” sophomore Bret Gorden said. “I think the most important thing is to have savings and a job as a way of paying off your credit card bill.”

Gorden said he was unable to get a credit card from American Eagle Outfitters and Structure, but was approved for one at Macy’s.

Other experts noted that today’s credit card solicitation is already less intrusive than it was in the past.

“In the ’60s, credit companies actually mailed out cards to all the incoming freshmen,” Spanogle said. “Kids were thrilled because it seemed like someone was giving them free money. The government put a stop to that, so now we get tables and solicitation.”

Credit card company representatives said individuals need to be responsible for their own financial decisions.

“Getting out of debt and learning financial responsibility are things faced by people of all ages, not just students,” said Judy Tenzer, a spokeswoman for American Express.

Tenzer said that while the company solicits students with small gifts, it doesn’t unfairly entice students.

While policymakers debate whether or not to restrict credit card companies, students will have to be responsible for their own financial decisions.

“I think that unless you have a steady job, you shouldn’t have a credit card,” said Backert. “You end up using this piece of plastic to pay for everything as if it’s money; you forget you’ll have to pay for everything later.”

For those who dive into the world of credit, there are some precautionary steps that can help students steer clear of debt.

“Look at introductory offers that may have expiration dates and annual fees,” Blandin said. “Learn how a credit card works, how finance charges are computed and the consequences of credit card misuse or inability to pay back the debt.”
-Julie Gordon and Alex Kingsbury contributed to this report.