The Dirty Secret of Student Credit Cards

Have you ever wondered why it’s so easy to get a credit card in college?

Credit card companies LOVE college students. And the numbers suggest that college students love to use their credit cards. Graduates face an average of $3,000 in credit card debt when they leave school.

Why is it so easy for college students to get credit? Why are credit card card companies showering college kids with thousands of dollars of credit? Well, credit card companies like two things. First, they like people who use their credit cards to make purchases. It’s easy to see that student card-holders are definitely making use of their plastic. Second, credit card companies like people who pay their bills. And college kids are always responsible with the bills, right? Hardly. College students use and abuse their credit cards, often running up balances they can’t afford to pay back. But the balances do get paid back, and credit card companies know exactly how.

This is what I call the “dirty secret” of student credit cards. Credit card companies will offer thousands of dollars of credit to an otherwise unqualified student because they know that the student’s parents will bail them out in a time of financial trouble. Of course, parents aren’t legally obligated to help. But rather than letting their child get eaten by the twin monsters of debt and poor credit, most parents will help their college student out if he or she is in a pinch.

Credit card companies are just fine with this pattern. It’s not their problem if the student is building a record of credit problems or developing irresponsible spending habits. When these things happen, the credit card companies get to charge even more for their services. All they care about is that the bill gets paid. At the end of the day, college students, despite being otherwise unqualified for credit, are a great investment for credit card companies.

My fellow college students, use your cards wisely. Your parents thank you.

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