Friday, March 28, 2008

Credit cards? Bah, humbug!

I hate credit card companies being on campus. I always have. Those stupid cards in the bottom of every bag I ever got from a campus bookstore...those tables on the quad, giving away stuffed animals, water bottles, Ipod shuffles, you name it...the poor students who work the tables to help pay off their own credit card bills... Yuck.

The gf tells a story about her first credit card as a new college student. First thing she did after it arrived? Took a whole large group of her dorm-mates out for dinner and drinks. After all, it was free money, right?

When I talk to students about activism, I often tell one of my favorite campus activism stories. It is about a group of students who wanted to take on the credit card companies on campus. They started a stealth campaign where they would plant a mark near one of those credit card tables on campus. When an unsuspecting student would come by to talk to the rep or look at the material on the tables, another advocate would come up to the mark and speak (loudly enough to be overheard) about the hidden costs of the credit cards. Another advocate "friend" would join them and talk about her high credit card bills and the way her percentage went up just because they judged that her credit was not as good anymore. Even though she had paid her bill on time, she would note! They would commiserate about friends they knew who had run up their credit cards and talk about how high the payments could get.

Often, this action had the desired result of both educating the students in the vicinity and depriving the company of one more debtor. In fact, this kind of "storytelling advocacy" was much more effective than handing out fact sheets with the same information.

Now, I'm not some absolutist freak who thinks that no one should have a credit card. I started graduate school without a credit card and actually made it through a couple of years with no credit, but it was difficult. Paying for books, conference registration, airfare, and hotels--really big expenses for a grad student on a very small stipend--was challenging! In fact, I may have had to borrow one of the gf's cards to get me by the first year I went to a national conference. I remember how relieved I was to get a credit card so I could pay for a hotel bill without being anxious. Credit cards do serve a purpose.

But the challenge is to keep spending on credit cards under control. The credit card companies don't make it easy, either. They offer limits that bear no relation to one's actual income--or lack thereof. They offer "points" and/or "frequent flier miles" that entice folks to use their credit cards for everyday bills. We do that, assuming we will pay them off at the end of the month, but then things come up and we let the balances grow.

I prefer the American Express kind of card--due at the end of the month--but I understand that it is nice to use credit cards for bigger items. That said, a lot of the bigger items (furniture, electronics, appliances) can be bought "same as cash" over a limited number of months. "Same as cash" is how we furnished our home.

But whenever I look at my credit card bills, I want to warn students about the troubles credit cards can bring. We don't teach students to balance checkbooks, to plan for their finances, or to think long-term about retirement. Isn't it too bad that they have to learn the hard way?


Anonymous said...

I think they way they keep pushing the cards on college students is ridiculous too, but I also don't understand how anyone could think it's "free money."

Anonymous said...

Consumer credit education is so important because you never know when it's going to lead you into trouble!

Anonymous said...

it's called personal finance and they require it in high school.

tho I agree everyone has the tendency to see credit as "free money" in undergrad; I disagree that everyone has access to other capital in college. social capital at certain institutions also requires economic capital and for some that requires credit. There is a great essay about the number of sweaters a college roommate has astounding a student of color with only one sweater to her name somewhere (maybe hooks) that speaks about this quite astutely.

sherishu said...

When are faculty going to challenge the system that REQUIRES we have credit cards to fund trips to conferences upfront and get reimbursed? Of course this system disadvantages grad students even more since they receive little or no funding for their conference travel. I'm 10 years out of grad school and I think I'm probably still paying for conference travel during my PhD program... You must present your work at conferences to get a job (or keep a job in the case of faculty), but your employing university sometimes pays none or only part of these expenses. It's a system that assumes we're all part of the elite "gentlemen" class where money is no object. And don't get me started on the expenses that candidates can incur when traveling to on-campus interviews! One place I interviewed required me to front all costs (including a last minute plane ticket) to the tune of around $1000. Luckily, I had credit cards, but said institution took about 8 weeks to reimburse me. Such a crock. Why do we allow these types of policies to continue where individuals must have credit cards to basically absolve their own institutions of the responsibility for these charges?

prof bw said...

anon - I think it is PHC's Fighting Words.

Sherishu - I agree & I think it is part of the overall assumption that we are all from the same class. I'll never forget being at a dinner with mostly high ranking faculty when I was on a teaching fellowship and hearing them lamenting a relatives' decision to take a $35,000/yr job. I said "that's more than I make right now."

lesbo prof - I know what you are trying to say, but I am always wary of the "credit card irresponsibility made me do it" argument. There are real structural inequities in school and very little done to mediate it. You either go into credit card debt or you go into loan debt, or both, to do what is socially and academically required to succeed in academe. And god help you if you actually complain or point that out in any real way.

Jay Livingston said...

(The "mark" is the target of a con game. The person who is really part of the group of con artists but pretends to be a naive bystander is a "shill.")

Quinn said...

One of the best jobs I ever had was working in the mail room of the credit card dept. of a bank. The work was nothing exciting, but boy howdy, I learned a lot about why NOT to get in credit card debt, sifting through that lovely bunch of mail.

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