Students gets some coaching to tackle credit card concerns
Posted on October 12, 2007
Filed Under Advice, Students Credit Cards | Leave a Comment
Rachel Wikoff received a credit card offer in the mail and signed up, intent on building up her credit rating.
The recent UC Davis graduate thought she was being careful. She set up automatic payment through her bank account, always paying more than the minimum amount.
After about a year, the minimum amount went up, but she didn’t notice and her automatic payment didn’t cover the bill. She was charged late fees, her interest rate leaped from 11 percent to 29 percent and her monthly payment rose from $10 per month to $89. She couldn’t afford the new rates and resorted to taking out a student loan.
“It just ruined my credit,” she said.
Wikoff shared her story in a telephone news conference Wednesday announcing a national campaign to educate students about credit card risks and urge colleges to adopt restrictions for campus credit card marketers.
The project, by the U.S. Public Interest Research Group Education Fund and Student PIRG campus chapters, is funded by the Ford Foundation. The campaign has established a Web site, truthaboutcredit.org, and will publish research reports on credit card marketing practices.
Campaign leaders say credit card marketers go to college campuses to recruit students as new customers, using free gifts to entice them to apply for low-cost cards - cards that may include high fees and penalty interest rates in the contract’s fine print.
Ed Mierzwinski, consumer program director of the U.S. PIRG Education Fund, the research and education affiliate of U.S. PIRG, said college students are vulnerable targets.
“They’re already hammered by the high costs of education. Credit cards seem like a solution, but they can become a trap,” Mierzwinski said.
by Sharon Stello
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