As wary as students and parents should be of harassment by credit card companies, they should be equally wary of the credit card seminars the companies run in college communities. Despite the noble goals they state (such as showing students how credit cards work and the importance of maintaining credit worthiness), the credit card companies are in business to earn interest on your debt.
In particular, students will want to beware of the credit card seminar dressed up as a fundraising event for a campus student group. Some credit card companies have cut deals with student groups whereby the group receives several dollars for each card application solicited at a seminar. No one gets something for nothing, and student groups owe it to their members to carefully scrutinize any business arrangement that translates into usurious interest rates on borrowed money.
The most common problem faced by students with credit cards is overextension. As students apply for and receive more cards, their spending further escalates along with their debt. In a development that brings to mind the old adage “leaving the fox guarding the hen house,” one major credit card company now runs advertising campaigns warning college students of the risks of carrying a heavy credit card debt and from misusing a credit card.
While the company claims the advertising is designed to “raise consciousness among 18–24 year olds about the realities, importance, and implications of establishing a positive credit history through responsible credit card use,” parents and students alike should be wary of a product that permits those without the resources or collateral to make a particular purchase, to make that purchase.