Are Credit Card Companies Targeting Students?

It is a sad fact that many young adults are finding themselves stuck with large amounts of credit card debt. it is estimated that the number of incoming college freshmen with credit cards tripled between 1999 and 2002 and that those freshmen carry an average of $1,585 in credit card debt.

Many young adults are an easy target since they don't have a clear understanding of how credit cards work and usually lack the financial responsibility to control their spending. The idea of , 'Buy it now, worry about it later,' usually overshadows complex terms such as minimum payments, interest rates, and late fees.

In the beginning, a young student might own one credit card with a limit of $1000, but by the end of school he/she might be stuck with several cards with a credit card debt of $8,000. All the while, the credit card companies profit from the growing interest and late penalties. Is it no surprise, then, that credit card companies are actively marketing to teenagers and young adults?

Because money management is not uniformly taught in high school, college is usually the opportunity young adults get to manage their own finances. If they are not educated on how credit really works, it can be overwhelming for the down the line.

Avoiding Credit Card Debt

Understanding how credit cards work can help young adults stay out of debt trouble. Here are some great educational references.

Credit Card Pay Off Calculator. Learn how long it will take to pay off any given balance at various interest rates and making only minimum payments.

StudentCredit.com Is a great resource that can really help young adults understand why credit card companies want them and how they can discipline themselves.

US Securities and Exchange Commission - Here is a simple outline introduces students to the basics of saving and investing and help them understand the importance of planning for their financial future.

EconomicsWisconsin - Is an excellent resource to teach students and young adults financial literacy and economic understanding .