Monday, October 12, 1998
Students accumulate larger debts from credit cards obtained at
on-campus tables
STUDY: Solicitors claim to target responsible applicants; others
urge to shop around for best rates
By Andy Shah
Daily Bruin Contributor
Students who obtain credit cards from on-campus tables carry
larger debts and pay off their balances later than those who do
not, according to the results of a national survey of college
students by the Public Interest Research Group (PIRG).
The survey, conducted in the spring on 15 campuses, including
UCLA, found that students who got cards from campus tables had more
cards than those who did not and had higher unpaid balances than
those who had not.
‘Students, especially those who fill out credit card
applications at campus tables in return for trinkets and candy, run
the risk of falling into the campus credit card trap,’ said Sujatha
Jahagirdar, campaign coordinator for CALPIRG, the California PIRG
chapter.
Jahagirdar said that students are primary targets of credit card
companies.
‘Students are targeted because they have great earning
potential,’ she said.
But most students did not find credit card education material
provided by the card companies to be resourceful, according to the
survey. Forty-one percent of students surveyed found credit card
education materials ‘helpful’ or ‘somewhat helpful.’ Over
one-quarter of students surveyed found introductory ‘teaser rates’
misleading.
‘Credit card companies are sometimes targeting low-income
students, who are financially independent for the first time and
not aware of credit cards,’ said Undergraduate Students Association
Council president Stacy Lee, who spoke at a press conference last
Friday announcing the survey’s results.
The survey also found that students whose credit card bills are
paid by their parents or others are less likely to have unpaid
balances than those who are responsible for their own cards,
obtained at campus tables.
Outstanding credit card balances, in addition to other financial
liabilities, may lead to future problems, said Ivan Frishberg,
director of PIRG’s Higher Education Project.
‘With credit card debt stacked on top of student loan debt,
these results would be alarming for students, parents and
educators,’ he said.
But credit card company representatives said that responsible
students can benefit by having a credit card.
‘We are performing a service for serious students,’ said Steve
Martinez, a marketing representative for MBNA Bank, which offers
the UCLA Student Alumni Visa and had a table out on Bruin Walk last
week.
Martinez added that his company was asked by the administration
to come to the school because the Visa card is associated with the
UCLA Alumni Association.
Jahagirdar said that credit card companies are specifically
targeting students by offering them free gifts if they sign up.
‘(Students) shouldn’t apply for a credit card just to obtain a
Frisbee or bottle of soda at a campus table,’ she said. ‘A Frisbee
may be worth $5, but you may end up with a debt of $1,000.’
Jahagirdar added that only college students are able to obtain
credit cards without a job or income.
But company representatives said they are egalitarian in their
targeting efforts.
‘We offer gifts to adults too, like sports tickets,’ Martinez
said.
The survey noted that while 79 percent of all students reported
using credit cards for purposes such as buying books or clothes,
only 13 percent said they used credit cards solely in
emergencies.
Ahmar Qasim, a third-year cybernetics student, said he initially
signed up for a credit card at a campus table only to buy gas. But
he said the temptation to use it for other expenses was too
great.
‘I was in Vegas once and ended up putting $400 on the card,’ he
said.
He said he was unaware that the company would charge an extra 10
percent on cash advances.
‘It was in the fine print, but I’m sure they put it there on
purpose,’ he said.
Jahagirdar said that the campus tables may spur spontaneous
decisions by students to sign up for credit cards, which may lead
to uninformed decisions.
‘Students who desire credit cards should obtain them when they
can afford them and should get them based on the best interest rate
terms,’ she said.
Lee said that if students sign up for credit cards, their names
might be given to other companies for solicitation.
She also added that the administration should curtail the number
of tables on campus.
‘Although we’re not recommending that they remove the tables,
the administration should limit the number there are,’ she
said.
But Martinez said that limiting the number of tables on campus
wouldn’t solve the problem.
‘We’re not here to baby-sit students. No one is forcing them to
sign up,’ he said. ‘And someone who signs up for the card for only
a stupid gift will be in trouble.’
Martinez said that other companies come to campus uninvited.
‘Some just crash the school, and sometimes they put up false
information,’ he said.
He added that students who handle their card properly can reap
the benefits of having good credit.
‘If you’re a responsible student, this is a good way to
establish your credit for the future. You can’t do anything without
a credit card, like buy a house,’ he said.
Jahagirdar offered the following tips to students who are
interested in obtaining a credit card: get only one card; pay off
the full balance each month; pay on time; and shop around for the
best interest rates and deals.
David Hill
First-year economics student Khue Pham applies for a credit card
at a booth.
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