"We're giving away complementary gifts, ya'll wanna' get a gift?" says a woman behind a credit card application booth at Texas Tech University. A t-shirt for a credit card application, it's their main sales pitch, and it's about all they need to entice young college students. "Does it matter if we don't have a job?" ask two juniors applying for cards. "Nah," says the lady behind the desk.
"I got my credit card, and I ran up the bill within probably eight months, maxed my limit. Not only did I max my limit, I went over my limit," says Jennifer Douglas, who got her first credit card from a credit card booth at Tech. "I eventually paid it off, and then I ran it up again and then, I finally ended up settling my account and it really bruised my credit," she says. Her social life was bruised, too. "Worked two jobs in the summer, all my extra money went to paying off all the stuff I bought. I had nothing to show for it," she says.
"Not all students behave like we would like them to," says Bill Gustafson with Tech's Center for Financial Responsibility. He says that students need to be responsible if they get approved. "There are some universities where senior administrators straight out say that they lose more students due to financial problems than they do because of academic problems," he says.
Credit representative George Hulse says building good credit early on is important, but he admits sometimes banks make it easy to blow cash. "Minimum they start them out is like $1,000. Personally, I think that, I personally think that's a little too much to give to a student. I mean, I think the banks cause the problem by giving them too much credit," says Hulse.
Gustafson says many students get taken because they just don't understand how credit works. "The kids that had parents that took an interest in their understanding of financial problems don't tend to get in trouble," he says.
For Jennifer, her lecture was almost too late. "Credit's not looking too good. I mean, it's not unrepairable, but if I kept going and doing the same thing it would be unrepairable," says Jennifer. Her advice is short and sweet: "Don't buy a $2,000 t-shirt."
Now, here are some additional facts: