Drowning in debt

Ben Wolford


Credit: Ron Soltys

It started with buying a little gasoline, but then Brian Dages, sophomore photo illustration major, found his credit card came in handy for buying school supplies.

Eventually the first card was maxed out, and he applied for another.

“I was just using it to buy gas,” he said, “but then I got too comfortable with it.”

It’s this comfort and ease of using a credit card that lures young, financially inexperienced college students into getting cards and then into debt. It’s a problem that’s worsening, said Kelly Paton, program coordinator of the Kent location of the Consumer Credit Counseling Service.

“(Credit card debt) is a rising problem for the college student population as well as consumers in general because the economy is tighter, peoples’ incomes aren’t increasing and there’s more and more drive to buy now and pay later,” Paton said.

According to Jessica Silver-Greenberg’s article “Majoring in Credit-Card Debt,” which appeared in Business Week Online in September some 75 percent of college students have credit cards now.

And that percentage is increasing, Paton said.

She cited changes in the credit card companies’ tactics as a reason for the growth in student credit card use.

“People always say, ‘Why will a credit card company give an 18-year-old a credit card if they’re not employed and they don’t have any income?'” Paton said. “What the credit card companies are doing is investing in what they hope to be future customers for life.”

And they’ll go to great lengths to snag those customers.

Some marketers are handing out Frisbees, T-shirts and iPods on college campuses to students who sign up for credit cards, according to Silver-Greenberg’s article.

Credit card companies are paying colleges big money to market to students.

Another article, “Freshmen, prepare for a credit card deluge” by Lucy Lazarony for Bankrate.com, said those marketing agreements “pay the nation’s 300 largest universities nearly $1 billion a year.”

Ron Kirksey, executive director of media relations at Kent State, said the university has never engaged in any such agreement, but for millions of college students on other campuses exploring their new freedoms, a new iPod and the tempting convenience of having a credit card seem like a good deal.

The more students holding cards, the more bills are distributed and the more payments go unpaid.

For Dages, the monthly payments don’t ever seem to go away.

“I don’t miss payments, but I keep spending it again,” he said.

That vicious cycle is what keeps Paton’s organization in business. She sees the negative effects of credit card debt.

“At some point students have to make a choice,” Paton said. “Do I cut back on the classes that I’m taking, or do I quit school for a while to be able to catch up on these things, or do I keep plugging away at it?”

Paton also pointed to the enormous level of stress that accompanies any kind of debt.

“The people that are calling trying to get payments don’t necessarily treat you all that well,” she said.

But consumer advocacy groups are trying to change that, pushing for congressional oversight on how credit card companies can offer services to students, according to Silver-Greenberg.

And in many cases, the pressure’s working.

“Some of the credit card companies on their own accord, but based on pressure that they’ve received from consumer lawsuits and those types of things, have made changes in their terms of agreement that are a little more consumer-friendly,” Paton said.

She remembered how last year one company relaxed its fees for late payments or spending over the limit so consumers wouldn’t get stuck in a rut so quickly.

Paton said she thinks preventative measures would be a better course of action.

“Through high school we don’t have any kind of education for people to know what to look out for, to understand how credit cards work, how interest rates work, how it impacts your future,” she said.

As Silver-Greenberg mentions, credit card debt of $15,000 that’s weighing on some college students’ shoulders would certainly have an impact down the road. And with interest rates and late fees, down the road isn’t too far.

“We’ve all been there,” Paton said of the college experience. “We get to try out our wings for the first time, but it catches up with us real quick.”

9.9 million

Number of students enrolled at four-year colleges


Percentage of students without a credit card


Percentage of students

with parents’ card


Percentage of students

who keep first credit card


Average balance owed

on credit cards


Average number of cards

per student


College dropout rate due to debt/financial pressure


College dropout rate due

to academic failure


Colleges banning credit card marketing

Source: United College Marketing Services

Contact features reporter Ben Wolford at [email protected].