T-shirts cloak misery of credit debts

They gave me a free T-shirt and a water bottle to apply for their credit cards. My clever plan? To sucker them out of their prizes and cut up the cards.
Four-thousand dollars later, after single-handedly paying the Village Wok’s bills for the year, I stopped spending, having achieved my desired level of debt. The T-shirt was in the trash with the water bottle.
My bills are now paid off, but other students are in grave danger, according to a slew of research. A study released last week reported that 70 percent of undergraduates have a credit card, with the average debt rising from $1,879 to $2,226 from 1996 to 1997.
Although there is every indication that credit card companies are overextending credit to young, unprepared and penniless students, the practice continues with permission from schools.
Colleges often receive money from card companies through partnerships and the rental of space for their application drives. This has led to calls for colleges to prohibit on-campus recruiting efforts, but only a few schools have taken this step.
“It’s easier for unemployed students to get credit than low- to mid-income families,” said Robert Manning, the Georgetown sociology professor who conducted the study.
The Consumer Federation of America, which commissioned the research, has been lobbying Congress to require applicants less than 21 years old to meet certain income requirements or have parental approval. They will use Manning’s results to support their efforts.
Researchers found that many college students had very negative experiences with credit cards primarily because of their inability to control their spending. Often, students will become despondent over their seemingly insurmountable debt, and, in extreme cases, credit card debt has been blamed for suicide.
Sean Moyer, a University of Oklahoma junior who made minimum wage, amassed 12 credit cards and over $10,000 in debt. He hanged himself in his closet in 1997.
Mitzi Pool, a freshman at the University of Central Oklahoma, also hanged herself, with bills for $2,500 in credit spread out on her bed. Earlier, she had called her mother to tell her she lost her part-time job and had maxed out her credit cards in only three and a half months at school.
Although it is likely that there were additional negative things in their lives that led to the suicides, consumer groups are using the deaths to highlight their cause. Manning said that marketing of the cards on campuses, “now poses a greater threat than alcohol or sexually transmitted diseases.”
He said that once a student runs up the debt and stops using the cards, it can take years to pay them off. Accordingly, large debt often slows a student’s progress through school, as he or she must work more hours to pay the credit card bills.
Many parents find it odd that these companies offer cards to those of us with no money, a relatively recent phenomenon. When I was worth $4,000 in credit, I was only making $150 a week. Had I tried, I could have signed up for more credit and spun even further out of control.
We credit junkies find it hard to avoid using the newfound power to make any impulsive desire a reality. In my glory days, I was like King Midas, pointing to things and turning them into my own. On a twisted shopping spree I wandered through stores, throwing items into my basket willy-nilly.
For me, the worst temptation was food. Rather than eat at the dorms, I was free to cram delectables in my wordhole at any time, from any restaurant. With a wave of my hand I would dismiss my companion’s concern about the price, while adding a generous tip.
The bill, when it finally comes, is so removed from the purchase that it’s hard to connect the two. While listening to tunes on your new stereo and munching takeout food, the monthly payment seems easy to pay, especially when you can get a cash advance to cover it.
And while your debt climbs higher, your perceived needs grow in proportion to the pretend money you have stored in the card, until you think you need $20 lunches every day and tickets to every concert in town.
Because one’s debt can grow quickly with these small, frequent charges, consumer groups have advised cardholders to avoid charging food, gas and other daily items. Instead, they recommend using the card to pay for larger, more thought-out purchases.
For me, the best solution was to cut them into little pieces and use cash only. Later, when I did apply for a card, I called them to ask an unprecedented question.
“Could you please lower my available credit to $500?” After checking with her supervisor, she did it, but warned me that I couldn’t raise it again for a year
Oh, dear! I’ll have to spend what I make for a while? Damn. And she didn’t even send me a T-shirt.
Brian Close’s column will appear on Mondays. He welcomes comments to [email protected]