Paying for college is a huge expense - tuition, housing, food, books and the expenses of day-to-day living leave most students with little cash, making credit an attractive alternative to going without minor luxuries. However, the immense expense also necessitates loans - subsidized and unsubsidized - for many students. When that debt is compounded by several credit cards, a gas card and phone card, students may find themselves with a lifetime of bills or an abominable credit rating.
These sign-up campaigns clearly target first-year students living away from home for the first time, and they create the irresistible - and imaginary - proposal of getting something for nothing. However, applying for these cards means more than getting a free T-shirt. While the representatives may claim that you can cut them up later, they would not waste their time with these massive sign-up campaigns if it were not in their best interest. Most people don't cut up their new cards - and cutting the card does not cancel the account. Those who do dispose of the cards will find themselves on a permanent mail and phone list, and barely a week will go by where a company doesn't try to talk them into yet another card.
College is a profitable market for credit companies. Statistically, college students spend a greater percentage of income on disposable or other non-essential goods. Credit companies take the risk that students will be able to pay it back, figuring that mom and dad will step in if the student cannot make payments. If students still cannot make their payments, the company will generally put a less-than-friendly collection agency on the case, and may face the repossession of any items of value - such as a car - that the student owns. Credit does not fade away; poor credit records may follow a person for years, preventing him or her from getting loans, mortgages or other lines of credit.
Exercising caution and restraint is the best idea. Students who can afford a credit card should shop around and find a single card that best meets their needs - not which one has the best signing bonus. The prize will be forgotten in a week. But the credit company will follow students until they get the money.
