no reason to run

It’s kind of cute to restrict student exposure to credit cards for fear we’ll drown in debt.

Pat Leung
Guardian

Gov. Gray Davis signed a bill Sept. 12 that affects the California State University system and community colleges, and may be adopted by the University of California as well.

Regulating the tactics credit card companies use to recruit new student customers on campus will help curb student debt, proponents of the bill argue.

But if the government is worried about my Visa bill, I hesitate to think how it might react to the $15,000 in student loans my parents and I took out this year. Now that’s student debt.

The bill is not the most exciting thing in the world. Its impact will likely be minimal — it is no big deal if credit card companies are forbidden to give us lollipops and highlighters for applying for their card.

The interesting thing about this bill is the rationale behind it: Legislators and university administrators must intervene on behalf of students who are unable to take responsibility for their own finances.

It appears that we are innocents who need protection from wily credit card companies.

This assumption is dangerous because it creates a relationship of dependence between the student and the university. When we are protected from marketing, we fail to develop money management skills that will be necessary in the working world — skills, in fact, that are necessary now. But we are not asked to become more economic in our spending, nor are we asked to be more moderate in our consumption.

For the sake of argument, students accept the premise that student debt is a problem. In fact, this premise is widely accepted and easily proved.

Citibank studies during 1999 showed that about 65 percent of students have a personal credit card. National studies for the same year showed that undergraduate students, ages 18 to 24, had an average credit card debt of $1,843.

A news article in The Daily Texan, a student newspaper at the University of Texas, reported that 78 percent of undergraduate students have at least one credit card, and 95 percent of graduate students have a credit card.

An article from USA Weekend reported that average student credit card debt has risen this year to about $2,220 for undergraduate students and $5,800 for graduate students.

Maybe we need help, but the paternalistic nature of the bill irks me. It reminds me of SB 19, a bill that seeks to limit junk food in California elementary schools.

It seems that children were plunking quarters into too many vending machines on campus, buying too much pizza from their school cafeterias, and generally getting fat enough to worry the grown-ups. So legislators wrote a bill, which may go into effect January 2002, proposing new health standards for food dished up in elementary schools.

I wonder if the legislators, in the spirit of nutrition, cleaned out their own vending machines or forbade junk food in their own lunchrooms. This reminds me of a joke I heard in Spain: You can easily discern an American in a crowd — look for the fat one, and you have your man.

I have the feeling that students are the new fat children of the State Senate. We cannot keep away from the sweets, so they are going to take them away from us.

In explaining the new rule that credit card companies cannot offer students gifts if they apply for a card, an official was quoted in the Guardian as saying, “”Many college students got credit cards just because they wanted free gifts.””

That’s just silly. We are not that dumb. I do not believe that there are students who are duped into signing up for a Discover card for a free gift.

For one thing, even if you do sign up for a card, you can choose not to activate it. If you activate it, you can choose not to use it. And if you use it, you can choose to pay it off on time to avoid that 17.99 percent annual rate.

You and I know that. The advocates of that bill should know that, too, and they should remember that there are plenty of nonstudents who are not much better than we are at wise spending — how much is that national debt again?

According to the 2001 Consumer Federation of America report, aggregate credit card debt doubled between 1990 and 1996, with an average household credit card debt of $7,000.

On its Web site, NEWAY, a nonprofit organization that works to reduce debt, reports that the average household has 10 credit cards. Students are not the only ones who need help.

We should hope that the main effect of the bill will be better debt education, which is meant to be part of the bill. I am skeptical of the claim that students who are “”inexperienced”” with using a credit card get themselves into financial trouble. More likely, impulsive shoppers and students with expensive taste get themselves into debt, no matter how “”experienced”” they are at using a credit card.

But if those in the know think that debt education is a good idea, let’s give it a try and see what happens.

Certainly our student government seems to be for it. The A.S. Council plans to request that Chancellor Robert C. Dynes impose regulatory policies on credit card companies.

At any rate, it seems a harmless, if not ineffectual little bill. Because it means that we may have one less vendor to dodge as we make our way down Library Walk, I applaud it.

If they want to eliminate commercials in the name of our innocence, OK.

And hey, perhaps things are not as grim as they seem. A study posted on a Web site — partially sponsored by none other than Visa — shows that 53 percent of students with credit cards pay their bills, in full and on time, every month. Less than 50 percent of adults can make that same claim.

Because the study says that only 13 percent of college students who hold credit cards applied for them on a university campus, the bill, if incorporated at UCSD, may not be necessary anyway.

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