Credit cards and Bivouac: Surviving in A2

Let's face it: We, as college students, represent one of the most naive segments of the American population. Newly independent, we amble through life without the wisdom of experience to guide us. Though we attempt to hide our inherent simple-mindedness behind organic chemistry textbooks and graphing calculators, it's still pretty evident to the rest of the populace that we have absolutely no street smarts whatsoever.

Tragically, no one is more aware of our elementary nature than the credit card company representatives who bedevil the campus with their application tables and free T-shirts every fall. Showing up in the idyllic late-summer months when the sun is aglow and the freshmen are out mating, they happen to catch us when our defenses are down and our naiveté is at its yearly peak.

Scott Hunter Roll Through the Soul

"Ay, yo, check it!" thinks the average student. "This is pretty schmoove. I fill out this here piece-a-paper an' I get a credit card just like that. Dayumn! Just think of all the tight Tommy hookups I can get for all the Union parties."

Freshly weaned from the financial treats of our parents, many of us have only recently assumed control of our personal finances and still don't have good financial sense. So we college students - more than any other group of hopelessly naive people - should be wary when the company representatives try to help us master the possibilities.

For most students, a credit card will provide increased purchasing power and the opportunity to establish a clean credit record. But this isn't true for everyone. Those with uncontrollable appetites for clothes and gadgets often wind up deep in debt. Though becoming a cardholder may seem like a mere rite of passage, the decision to get one should not be taken lightly.

Now the whole credit card issue may seem like common sense: If you know you're an irresponsible spender, don't get one. While on the surface it may seem just that simple, no one can deny the powerful temptation to go around wielding plastic.

For instance, remember the first time you wandered into Bivouac?

Everything was cool until the cute saleswoman (who doesn't work there anymore) caught you gawking at the exorbitant prices on all the North Face gear: "Get out of here, you disgusting serf!" she bellowed. "And so help me, if you put your plebian hands on any of the fleeces on your way out!" Experiences like this one, which are pretty common in Ann Arbor, often convince us that Visa is our only salvation, our one hope to at least pretend that we aren't standing by our mailboxes waiting desperately for our next financial aid checks to arrive.

We want all the luxuries we had at home - the car, the clothes, the meals - but we just don't have the income. And even though Visa and Mastercard know we're broke, they're still right there to help us. But they don't give us credit cards for purely charitable reasons. They're trying to get over on us, as much as we're trying to get over on them.

Let me explain ...

Credit card companies started using a strategy called bottom-feeding in the early 1990s to increase market share. In this method of card solicitation, companies scour the country in search of people who are - how should I say it? - "financially challenged." This group, of course, consists of those most likely to develop credit card debts because of limited resources. A decade or two ago, if you weren't well-paid, you could just about be sure that you'd get rejected when applying for credit.

But times, they are a-changing.

Between 1993 and 1996, the percentage of households with incomes under $20,000 that received credit card offers jumped from 36 to 58 percent. And once companies decided to start distributing cards on an everybody-and-their-mama basis, payment defaults went up by 40 percent.

Since American Express, Visa and Mastercard only make money when you or I accumulate interest debt by failing to pay off our monthly debts, it's obvious why they target college students: We're all broke and probably won't always be able to pay off our debts on time.

Although our demographic - young and unwise - is probably more at risk for developing problems than the average American, the overwhelming majority of us - well over 90 percent - will emerge unscathed. We'll handle our business well, create great credit records, and soon, we'll get promoted through the credit card hierarchy - plastic, gold, platinum. Then, we'll really be stylin' at all the Union parties.

And maybe they'll finally accept us at Bivouac.

- Scott Hunter can be reached over e-mail at sehunter@umich.edu.

09-21-98