The Controversial Issue of Substantial Credit Card Debt Among College Students

In recent years, college students have begun to face more hardships and challenges than ever before. These issues include rising student loan debt, increasing textbook costs, and the lack of suitable parking. However, one major issue confronting college students today is the increasing amount of students weighed down by substantial credit card debt. It is common practice in many universities during orientation and beyond to have areas set aside where students can apply for a variety of credit cards. Though useful and sometimes necessary for college students, credit cards can lead to rampant debt and other financial problems among students. Despite these dangers, college students should not be forbidden from obtaining credit cards because; it allows students to practice money management and mature as an individual, it makes it possible for them to develop a credit score, and it will allow students who go to school far from their parents to more easily obtain financial assistance from them.

Opposing Viewpoint

Despite the positives of allowing college students to obtain credit cards, support for the prevention of this derives from the many dangers associated with college credit card debt. The main opposition to allowing students to own credit cards derives from the parents of students who have been negatively affected by credit card use. A group of these individuals has even formed themselves into an organization known as the Parents for the Removal of Campus Credit Cards or PRC. (Cuse) These parents have witnessed their children face a multitude of tribulations as a result of credit card use, ranging from rampant debt, drug use, and even suicide. To show the staggering amount of danger this poses, many members of the PRC site statistics from undergraduate students in the U.S. from 1998-2011. Sallie Mae, a company founded on the basis of helping students pay for the variety of costs associated with college life found that “the average undergraduate carried $3,173 in credit card debt last year, the highest level since surveying began in 1998”(Chu) This number becomes even higher at larger universities such as “Ohio State and the University of Wisconsin”. (Chu) These numbers seem astonishing considering the amount of debt that college students already face after graduation, due to the cost of paying off student loans, housing, etc. Another disturbing trend that the parents of those victimized by credit card debt often site is that the average debt from credit cards often increases as the student gets older. For example, “college seniors with at least one credit card graduated with an average of $4,138 in card debt, up 44% from 2004. By comparison, freshmen's average credit card debt jumped 27% to $2,038.” (Chu) This statistic can be seen as especially disturbing as it shows that not only are college students getting into debt, but they are allowing it to escalate rather than decrease. These alarming statistics involving credit card debt among college students is one major reason for the push for the prevention of credit cards for students.

Another reason credit card use among college students has been under criticism recently from parental groups such as the PRC is the negative effects it can have on the student’s way of life. For example, allowing college students to easily obtain credit cards make it easier for them to buy things that they cannot afford. Also, they may be unaware of the dangers of credit cards such as interests and monthly payments and therefore purchase items at an alarming rate. Many parents of students with substantial debt make the claim that their student was simply unaware of the dangers posed by credit cards. This of course leads to other problems such as students being forced to maintain a part time job in order to pay off their debt. Due to their new financial obligations, these students might see a negative impact on their schoolwork, all because they had fallen into debt due to their credit card use. Another danger of allowing students to easily obtain credit cards is that it would allow them to “ruin” their credit score (by way of late payments) in a time when they may not have fully matured, therefore affecting their long-term future for something they did while in college. This ruining of ones credit score could have wide ranging effects later in the students life, should they attempt to purchase a loan for a house or car. These dangers are a great part of the reasoning behind the movement to prevent college students from obtaining credit cards.

Supporting Research

The issues that occur as a result of credit card use among students have been well documented, however, there are also many positive effects that result from allowing college students to obtain credit cards. One such benefit of allowing students to obtain credit cards while in college is that they provide students with a chance to practice money management skills while still in college. “Much in the same way as a summer job, allowing college student to hold credit cards gives them a chance to practice spending in a real world atmosphere. Having a credit card in college gives these students a chance to mature as people and learn the value of a dollar.” (Nelson) Those employed by the university as well as legislators for the area make these claims to show the importance of credit cards in establishing these very important lessons that one could need almost immediately following graduation.

By preventing students from being able to obtain these credit cards, it would take away their chance to develop this important skill. In addition, forbidding students from obtaining credit cards would instill the idea in college students that they are still under guardianship and therefore not prepared for life after college. This would be in complete conflict with many of the ideas that universities attempt to instill upon their students such as responsibility and maturity. Therefore, by prohibiting college students to obtain credit cards, you are essentially robbing them of their chance to mature and develop as adults. A study done by the University of California discovered that students who owned a credit card were “over 25% more likely to graduate on time.” College administrators often harp on this point when faced with this issue as they believe that not only would this action prevent them from establishing valuable money management skills, but it also creates conflicting idea of what is expected of them while in college. Though this is one of the more discussed reasons for allowing students to obtain credit cards, there are also many other factors which greatly affect the lives of college students.

The next reason why college students shouldn’t be prohibited from owning a credit card is that owning one would provide them with a chance to develop their credit score. Many who are against allowing college students to obtain credit cards cite the danger of allowing students to rack up credit debt, therefore ruining their credit score. However, preventing students from obtaining a credit card also prevents them from being able to establish a good credit score. If students were restricted from obtaining credit cards while in college they would have to wait until after they graduate to begin building their credit score, greatly hampering their ability to purchase a car, home, or any other item which requires an extensive credit check. In this way, the prevention of students obtaining credit cards can actually be extremely detrimental to their efforts to obtain a positive credit score. Though these issues mentioned above pertain to the life of students after they obtain their degrees, there is also evidence to suggest that preventing college students from obtaining credit cards could have negative effects on their lives while still in college.

The final way in which it would benefit college students to allow them to obtain credit cards is that it would allow them to purchase necessary items that they would otherwise have had to wait for. This is especially important among college students from low-income families as it would allow them to purchase items such as food and textbooks when the need arose, without having to wait for their scholarship endorsements or paychecks to come in the mail. It is for this reason that the majority of college students, as well as some of their parents, are adamantly against the prohibiting of college students from obtaining credit cards. In addition, having a credit card in case of an emergency could be very beneficial to a college student with no substantial means of income. Should an emergency arise, a student may be better served having a credit card easily obtainable should they need immediate financial assistance. This is a point which has caused several students parents to change their views in regards to this issue. This advantage of owning credit cards is especially prevalent should the student go to school a great distance away from their parents. This is important as it is often difficult for parents to transfer money to their students in a reasonable time frame. This problem would be easily remedied by allowing the student to own a credit card as if an agreement was in place for the parents to pay their students credit card bills, it would therefore provide the students with a means of easily obtaining financial assistance from their parents. These are some of the main reasons why college students should not be prohibited from obtaining credit cards.

Personal Stake

As with anything else, whether credit card has a positive or negative effect on college students depends on the individual student. My personal stake in the issue is that I am a college student and that students should be in no way prohibited from obtaining and using credit cards while in college. For a responsible student, credit cards can be useful tool to help then now and in the future. It is because these “responsible students” that credit cards should not be banned. To ban all college students from obtaining credit cards would deprive these individuals of something that could have an extremely positive influence on their life, not only in college, but for the rest of their lives. I personally own a credit card and have not experienced any of the problems that those opposed to student credit card use, such as the PRC, have claimed. Though this idea of banning credit cards may seemingly be positive on the student’s future, however the prevention of credit cards can easily have more damaging effects than the credit card itself. Preventing college students from obtaining credit cards would in turn prevent them from obtaining valuable skills and life experience. I believe allowing college students to obtain a credit card gives them opportunities to; practice money management and develop their maturity, develop a credit score, and it will allow students who go to school far from their parents to more easily obtain financial assistance from them. For these reasons, I believe that students should not be prevented from obtaining credit cards while in college.

While the usual response to rising credit card debt among students is a plan to prevent students from obtaining these cards, I feel a better solution would be for a raising of awareness on this issue. If universities were to provide education on this topic, it could greatly reduce the amount of students at their university who fall victim to credit card debt. In 2004 a class on credit card debt was established at the University of Oregon. A study done of students who took this class compared to others at the university who did not found that “in those who participated in the six week class there was almost no instances of credit card debt, while those who were not informed to the subject sustained at the nationwide level.” (Cuse) Due to the effectiveness of this class, the University of Oregon has adopted it as a continuous part of its curriculum. Though I realize the difficulties with creating classes such as this in every university, it still supports the idea that education about the issue would be not only more practical, but also more effective than preventing students from obtaining credit cards all together. In addition, even if it wasn’t feasible for universities to implement classes on the subject, they could still provide this knowledge to their students through the use of optional seminars, or as a curriculum in their University Orientation class. By using either of these methods, universities would be able to warn students of the dangers of credit card debt, while at the same time not exceeding their time or budget issues. This would be far superior to banning credit cards for students all together as it would help alleviate the problem, but at the same time it would not prevent responsible students from obtaining credit cards that they could have great use for. It is for these reasons that the prevention of students obtaining cards cannot be the best action in the attempt to prevent credit card debt among college students.