• curiouscat.com
  • About
  • Books
  • Glossary

    Categories

    • All
    • carnival (41)
    • chart (8)
    • Cool (35)
    • Credit Cards (45)
    • economic data (62)
    • Economics (439)
    • economy (126)
    • Financial Literacy (292)
    • Investing (324)
    • Personal finance (356)
    • Popular (43)
    • quote (194)
    • Real Estate (120)
    • Retirement (65)
    • Saving (90)
    • Stocks (158)
    • Taxes (51)
    • Tips (129)
    • Travel (7)

    Tags

    Asia banking bonds capitalism chart China commentary consumer debt Credit Cards credit crisis curiouscat debt economic data Economics economy employment energy entrepreneur Europe Financial Literacy government health care housing India interest rates Investing Japan John Hunter manufacturing markets micro-finance mortgage Personal finance Popular quote Real Estate regulation Retirement save money Saving spending money Stocks Taxes Tips USA

    Recently Posts

    • New Health Care Insurance Subsidies in the USA
    • Individual Stock Portfolio Investment Planning
    • Finding Great Investments Keeps Getting Harder
    • Huge Growth in USA Corporate Debt from 2005 to 2020
    • Retirement Portfolio Allocation for 2020
    • Tencent Gaming
    • Tucows: Building 3 Businesses With Strong Positive Cash Flow
    • The 20 Most Valuable Companies in the World – Jan 2019
    • 20 Most Popular Posts on the Curious Cat Investing and Economics Blog in 2018
    • An Inverted Yield Curve Predicts Recessions in the USA
  • Blogroll

    • Curious Cat Management Improvement Blog
    • Freakonomics
    • I Will Teach You to be Rich
    • Jubak Picks
  • Links

    • Articles on Investing
    • fool.com
    • Investing Books
    • Investment Dictionary
    • Leading Investors
    • Marketplace
    • Trickle Up
  • Subscribe

    • RSS Feed

    Curious Cat Kivans

    • Making a Difference

Investing and Economics Blog

Majoring in Credit Card Debt

Majoring in credit-card debt:

Critics say that as the companies compete for this important growth market, they offer credit lines far out of proportion to students’ financial means, reaching $10,000 or more for youngsters without jobs. The cards often come with little or no financial education, leaving some unsophisticated students with no idea what their obligations will be. Then when students build up balances on their cards, they find themselves trapped in a maze of jargon and baffling fees, with annual interest rates shooting up to more than 30%. “No industry in America is more deserving of oversight by Congress,” says Travis Plunkett, legislative director for Consumer Federation of America, a consumer advocacy group.

First, it is sad that college students are so lame they can’t even understand basic personal finance concepts like high interest credit card debt is very bad. But millions of them seem to actually be that lame (not exactly a great sign from our future leaders :-/). The credit card companies actually claim: “Our overall approach toward college students is to help them build good financial habits and a credit history that prepares them for a lifetime of successful credit use.” Does anyone believe this? A related articles discussed how much cash universities were taking from credit card companies: The Dirty Secret of Campus Credit Cards.

But Leech warns that schools that get money from credit card companies through affinity contracts or other marketing agreements face intractable problems, in which the school’s financial interests are in direct conflict with those of students and alumni.

It really isn’t that hard to do the right thing. Credit card companies have learned to profit by gauging their customers. If they claim that they are trying to teach good financial habit then the university to set up a contract to favor that. If bad practices occur (students not paying off the full balance say) they the credit card companies don’t get to make a profit on that – since it would be rewarding failure by the credit card company. How you want to do this is up to you but I can’t think of several ways. It is pretty simple – don’t let the credit card companies profit by encouraging stupid credit card use – like they do now.

Yes, creating a climate where the universities focus on the credit card companies actually doing what they say they want to do is a new way of thinking. But paying universities millions to market exorbitantly expensive financial products that harm students finances and teach them bad financial lessons is not some grand tradition passed down from Cambridge 200 years ago. Obviously neither side minds doing things differently for the right amount of cash. Lets see if they mind doing so to help the students learn. My guess is they will mind doing that. But I will be happy if I am proved wrong. My guess is that some schools would (and maybe even are doing this) – some schools really do care about helping their students learn.

The universities could choose to use their clout to help student instead of just getting a big payday for themselves. That would be a good lesson for students to learn. Much more effective then telling students they really should act ethically and not only chase after the dollars after they graduate. Such “advice” rings pretty hollow if you see that same university selling students out for a quick buck.

Related: Poor “Customer Service” from Discover Card – Credit Card Tips – Don’t Let the Credit Card Companies Play You for a Fool

September 10th, 2007 John Hunter | 1 Comment | Tags: Credit Cards, Financial Literacy, Personal finance

Comments

1 Comment so far

  1. Student Credit Cards at Curious Cat Investing and Economics Blog on July 20, 2008 6:38 pm

    I posted before on how universities seek profits instead of helping students develop good financial literacy and habits. Here are some tips on how you should use your credit card…

Name (required)

Email (required)

Website

Speak your mind

« Homes Entering Foreclosure at Record
Fair Use Worth More to Economy Than Copyright, CCIA Says »
Copyright © Curious Cat Investing and Economics Blog

    Personal Finance

    • Credit Card Tips
    • IRAs
    • Investment Risks
    • Loan Terms
    • Saving for Retirement
  • Archives

      All Posts
    • March 2021
    • January 2021
    • August 2020
    • March 2020
    • February 2020
    • January 2020
    • May 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • August 2018
    • May 2018
    • February 2018
    • January 2018
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • May 2017
    • April 2017
    • March 2017
    • February 2017
    • January 2017
    • December 2016
    • November 2016
    • October 2016
    • September 2016
    • August 2016
    • July 2016
    • June 2016
    • May 2016
    • April 2016
    • March 2016
    • February 2016
    • January 2016
    • December 2015
    • November 2015
    • October 2015
    • September 2015
    • August 2015
    • July 2015
    • June 2015
    • May 2015
    • April 2015
    • March 2015
    • February 2015
    • January 2015
    • December 2014
    • November 2014
    • October 2014
    • September 2014
    • August 2014
    • June 2014
    • April 2014
    • March 2014
    • February 2014
    • January 2014
    • December 2013
    • November 2013
    • September 2013
    • August 2013
    • July 2013
    • June 2013
    • May 2013
    • April 2013
    • March 2013
    • February 2013
    • January 2013
    • December 2012
    • November 2012
    • October 2012
    • September 2012
    • August 2012
    • July 2012
    • June 2012
    • May 2012
    • April 2012
    • March 2012
    • February 2012
    • January 2012
    • December 2011
    • November 2011
    • October 2011
    • September 2011
    • August 2011
    • July 2011
    • June 2011
    • May 2011
    • April 2011
    • March 2011
    • February 2011
    • January 2011
    • December 2010
    • November 2010
    • October 2010
    • September 2010
    • August 2010
    • July 2010
    • June 2010
    • May 2010
    • April 2010
    • March 2010
    • February 2010
    • January 2010
    • December 2009
    • November 2009
    • October 2009
    • September 2009
    • August 2009
    • July 2009
    • June 2009
    • May 2009
    • April 2009
    • March 2009
    • February 2009
    • January 2009
    • December 2008
    • November 2008
    • October 2008
    • September 2008
    • August 2008
    • July 2008
    • June 2008
    • May 2008
    • April 2008
    • March 2008
    • February 2008
    • January 2008
    • December 2007
    • November 2007
    • October 2007
    • September 2007
    • August 2007
    • July 2007
    • June 2007
    • May 2007
    • April 2007
    • March 2007
    • February 2007
    • January 2007
    • December 2006
    • November 2006
    • October 2006
    • April 2006
    • March 2006
    • January 2006
    • December 2005
    • October 2005
    • July 2005
    • May 2005
    • April 2005
    • April 2004