DOLLARS AND SENSE

PREDATORS ON CAMPUS PROVIDE TEACHABLE MOMENTS

by Joe Plemon 

              As Junior leaves the nest to start his college years, you once more go through a mental checklist of everything required to prepare him for independence and the world of scholastic responsibility.   Did you include plastic predator alert on your list?  I refer to the credit card companies baiting the newest kids on campus.  While dozens of schools across the country have kicked credit card companies off campus in recent years, the world of plastic has become more creative in marketing to teens on campus. 

             The newest scheme is to give students a coupon for a free lunch just off campus limits and then requiring the hungry teen to fill out an application for a credit card before getting the free sub sandwich.  Aletha Boggs,  a 19 year old freshman at the University of Arkansas, was completely unaware of what she had signed until a week later she received a credit card in her mailbox with a $2,000 limit.  Now, a year later, her card is maxed out and she is struggling to make her payments.  “I really don’t know how to do the budgeting and now I am lagging behind,” Boggs admitted.

            Unfortunately, Boggs is not alone.  According to student loan provider Nellie Mae, the average balance on undergraduate credit cards was $2,169 in 2005.  And 19% of bankruptcies in America are filed by young adults aged 24 and under.  

           So, mom and dad, here is a plan.  Instead of simply lecturing “Just say no”, seize this teachable moment and emphasize how shallow and dangerous the “buy now, pay later” mantra is.  Discuss saving for purchases, budgeting for spending money and setting specific financial goals.  Offer (or promise) to review those goals with your college student periodically throughout the school year.

            Yes, there are predators on campus, but your influence can help your child steer through the mine fields of credit and arrive at adulthood wiser and wealthier. This is a discussion worth having.