Did you all see the story on college students and credit last night on 60 Minutes II. What did you all think about the parents complaint that the colleges are making money off credit cards for students? Two parents had children commit suicide, they say, due to the debt they got into. What struck me was the collection agency who told the mother of the child who had just passed away that, if she really wanted to honor her son, she'd pay his bill. Sounds extreme but the same thing happened to my father-in-law. His 33-year old daughter died (my sister-in-law) and they said the same to him over a $500 fingerhut bill.
I think most college kids do not have the sophistication in financial matters to handle all that "free money" - I know I didn't. When I was in college in the 60's they just sent us the cards, unsolicited. Fortunately for me, the computers used now to track people down, and keep tabs on the debt, did not exist back then. I just moved to another state, and that was the end of that debt I think a lot of students have benefitted from having the cards, and have handled themselves well, but I think that the CCC's should not keep raising the limits and charging exhorbitant interest and fees. There should be some restrictions placed on student cards in that regard. The FUSA rep cracked me up and made me mad. Knowing their games, how could a college student stay out of trouble? I have a naive friend who has a FUSA card. She commented, "it's not possible to pay them on time. No matter when I mail it, it's late." Now her credit is too screwed up to get any other card. On the other hand, we are not living in the age of personal responsibility, and I think it is time that changed. Maybe that could be done in these cases by converting the revolving debt to an installment loan when it reaches a certain point, and the individual has demonstrated they cannot handle the freedom of a revolving account. Of course this would cut way down on profitability of the CCC's. Just a few thoughts... breeze
That was actually a repeat, and I saw it the first time it came on. There is also an article in Kiplingers about something similar. First, I think overall, that parents should teach their children REAL WORLD finances before they go off to college. My mother tried and all she said was, "If you charge, pay it off each month". But what she DIDN'T say was what happens if you don't and how that will affect me at 25 when I want to get a new car or if I got married and my husband and I wanted to buy a house. OR how it might affect my ability to EVEN GET A JOB. So I got caught up. By the time I graduated, I had 6 or 7. My father paid them off for me which probably...no, it WASN'T a good idea. I charged them up again and got 5 more. Then I started struggling. I'm just glad I learned in time...before I was at the age when credit REALLY matters. HOWEVER, I think that these CCCs are scandalous. I remember back then, they would be on campus every week day - in the breezeway by the student union - by the ATMs. They put fliers and applications in your bag when you buy things from the bookstore. They would be giving out airline tickets (Amex) and food and tshirts...things that college students want. I filled out an application for a Goodyear card for a 2 liter bottle of pop. I didn't even have a car!!!! And when it comes to income, you tell them, "I only have a workstudy job paying $6.00" and they tell you to use your financial aid award amount as your income!!!! YES. So, I put down $23k...I mean, that's how much my financial aid was! And that's how it all starts. I worked in the mailroom at the residental college and I'd see stacks of credit cards coming in the mail ALL THE TIME. Some kids would have 2 and 3 in their box at a time. And at my school, there was a mall very close, an eletronics store, record store and drug store across the street. Even Dominos took credit cards. Burger King and Wendy's started doing it also. I agree with Breeze about the personal responsibility...thats why when and if I have children, they will know EVERYTHING about this. But I also think CCCs should stop acting like scavegers and using these tactics to lure college studnets.
I saw that same report last night. I thought it was interesting to note how much money those credit card companies are paying the colleges to let them come on campus, $13 million+. Thats a great deal of money to put into getting students to have credit cards. Fortunately, I didn't go through what some college kids are going through. I got my first card when I was 18 and used it to purchase all of my goods but I always made sure I paid the bill in full every month. Now, at 21, I have all prime cards, ex:Amex, Citi, and Discover and I do the same thing, pay off my bills in full. This is where many young ones get into trouble, especially in college. I guess what helped me was the fact that I went to a 1 year college technical computer college right after HS and began FT work in the IT field immediately afterwards. Most students are in college for 4 years. So, I got a head start in paying off credit card bills and similar monetary expenses. "If you really wanted to honor you son, you would pay us the balance of his debt" If someone told me this, I would be utterly upset. Thats not a nice thing to say to anyones child who is not alive. I can only imagine how deeply impacted the parent feels after being told something like this. I guess what gets many young ones into trouble is: 1)they go out and buy everything they want because they know they can put it on plastic 2)they make minimum payments each month and continue to accrue debt. In a case such as this, serious debt is never hard to escape. 3)They don't pay bills on time or not at all. We have to all remember that we need to live within our means. Simply put, if you don't have the money to buy something in cash, it wouldn't be wise to put it on credit. I just prefer using credit cards because they are so much more convenient than cash and checks. Well, thats all for now.
I think the credit card executive who said the parents should honor their dead son by paying his bill is a creep! Two points: One, it's not the parent's debt. Two, the son is dead and the executive should honor that by forgiving the debt in an intellectual sense because of the tragic circumstances surrounding the bill. Of course, I don't know if the debt transfers to someone else, like the parents, when their is a death. But since this greedy pig was suggesting the parents should pay, the company probably is stuck with the son's bill. Moreover, this creepy executive person probably will get a "vacation" or other incentive goodies like a percentage of the amount collected on the "lost" account.
I know that show was a trip, I can't believe that one girl kill herself over $3000 dollars in debt. But the guy who had 14,000 in debt over did it a tab bit. Dang it doesn't make my debt $2500 from credit cards in college debt look bad. I sure hell would not kill my self over it Well it is pretty sad it ended that way for them.
When I was in college, all they had was the applications everywhere but it was well known that you could get a card very easily...I was an older student, late 20's so it wasn't so bad, kinda nice actually, but had I been younger I might have really done damage to myself.
I think that genuine prime cards are a great way to finance certain expenses while in college. I have in mind books, interview attire, perhaps computers or software. If those items help you earn your degree and make more money, there's no reason to worry about carrying a balance until you land that first real job. However, the cards should be prime, so the finance charges and minimum payments don't cause problems while the debtor is still in school. Every student should be taught the characteristics of subprime cards, and warned not to accept them. Also, a student should never use a credit card at a bar. Ever. With impaired judgement due to alcohol and persons of the opposite (or possibly the same) sex, anything can happen.
Having charged myself a few thousand dollars into a hole the first year of college, I can relate to the "in over your head stuff". What I thought was tragic was those kids did not understand the law on such a basic level. While I am not saying everyone with debt should declare bankruptcy, clearly the kid heading to LAW SCHOOL with 14,000 should have 1) realized they do not put debtors in prison anymore and there were solutions such as BK and 2) could have possibly been depressed too causing the massive debt to push him over (who really knows?). I think it is a shame that industry has taught people that debts are moral obligations and scare them into thinking there is no way out except suicide. This is exactly the situation designed for BK. If someone had told me about BK in 93 (I was still in school) when I first got into trouble, I would still have bad credit but would have gotten the fresh start I needed, finished my education on time and be less in debt (no student loans if I hadn't taken 8 years to finish the degree due to having to work to make CCCS payments). Just my 2 cents. BK law is the result of unpayable debt and the ability to discharge the debt is a right that these kids in such clear danger should have realized they had. The parents should never be responsible for consumer debt taken on by their children over 18.
If that company happened to be First USA, then I wouldn't be a bit surprised by a tactic like this. In fact, the parents had better watch out and check their own credit, because I wouldn't put it past First USA to somehow apply the debt to them, whether they're responsible or not. This has probably already happened, since FUSA is calling the parents. If First USA has done this (applied the debt to the parents), then those poor parents are facing an incredible credit nightmare on top of losing their child. It was probably the rotten "collection" tactics and intimidation which pushed their child toward suicide in the first place.
