St. Charles Community College helps students avoid credit card trouble
St. Charles Community College is taking steps to help those and other students make better financial choices.
"Students at St. Charles Community College not only receive education in the classroom, but they also have educational opportunities for challenges they may face outside of college," said Heather McDorman, SCC director of marketing and communications.The Social Science Society, an SCC student club, recently offered a series of seminars and films to help inform students on the rising problem of debt and credit card abuse.
Sheena Rice, St. Louis Community College-Meramec campus organizer for the Missouri Public Interest Research Group, shared some statistics about student debt with a few SCC students, as well as tips on ways to get out of it.
"I really think it's one of the more pressing concerns right now," Rice said. "Students at community colleges are at risk because of rising tuition costs, especially those looking to transfer."
Rice said the U.S. Public Interest Research Group conducted a survey of 32,000 students, and the average student credit card debt added up to $4,000. Students often acquire anywhere from $10,000 to $20,000 of debt from educational loans, she said.
"At least 83 percent of young adults carry at least one credit card, and the average carry four to five," Rice said. "You go into Old Navy or Victoria's Secret and the cashiers try to sell you credit cards. That's hard for some students to pass up."
Travis Ford, consumer educator with the state attorney general's office, said students should be careful of the methods by which they try to get out of debt.
"There are a lot of ways that students can get themselves in trouble for what looks like fast, easy cash," Ford said, referring to payday loan companies and some debt consolidation groups.
Ford said good credit counselors provide a list of fees "with no surprises."
"Verify with your creditors to see if they are actually getting the money," he said. "Watch your (billing) statements."
One of the most important things students should pay attention to is their credit card's annual percentage rates, Rice said. She said credit card companies often offer 0 percent interest rates initially to students, later increasing those rates to up to 25 or 30 percent.
Rice said most students don't understand the language on their credit card statements and bills.
"They don't realize what a 30 percent APR really is," Rice said. "Some students don't know that it may just mean 0 percent for the first six months, and then after that it could jump to 25 percent."
Rice said another thing students should be on the lookout for is annual fees. Students also are encouraged to find out if their credit card company has a universal default clause, she said, which means that even if a student pays a credit card bill on schedule, then they still could be charged extra for other delinquent bills.
"Even if you make all the payments on time and you get behind on another utility bill, you could be charged a fee for being default on that bill," Rice said.
Rice said campuses should protect students from heavy marketing from credit card companies on campus.
"We are posting the principals to promote responsible college credit card practices," Rice said. "We need to prohibit the use of free giveaways."
SCC has a solicitation policy to help to students, McDorman said.
The policy prohibits solicitation by groups except in the case of "events and activities specifically approved for vendor participation."
The College defines solicitation as approaching or summoning individuals for the purpose of gaining support, collecting information, or engaging in the sale or marketing of products and services, according to the policy.
Rice said a study conducted in 2006 revealed that U.S. citizens encounter nearly 8 billion credit card solicitations each year, which was up 30 percent from 2005.
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Tips to avoid or relieve credit card debt:
> Shop around before settling on a credit card.
> Use credit cards sparingly.
> Pay off balances each month.
> Make your payments as early as possible.
> If credit card rate is too expensive, call the credit card company and ask for a better rate.
> Seek help from a credible debt councilor to reduce debt.
> Contact the Better Business Bureau for credit counseling company's reputation.
> Contact the state attorney general's office to view consumer complaints about a debt consolidation company.
Source: Sheena Rice, with the Missouri Public Interest Research Group and Travis Ford, consumer educator with the state's attorney's office.
