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Students still in danger of overwhelming debt from credit cards

Credit card companies are still targeting college students in Texas and elsewhere to offer them more plastic for their wallets and purses. There has been concern for a long time that inexperience with credit and financial matters could leave some college students at risk for developing bad habits when it comes to money. This may leave them vulnerable to accumulating overwhelming debt due to mishandling of credit cards, which could in turn cause filings for bankruptcy protection from college students.

In order to minimize this risk of crushing credit card debt, Congress has sought to regulate the credit card industry more stringently. The Credit Card Accountability and Responsibility and Disclosure (CARD) Act of 2009 was designed to limit aggressive marketing techniques that credit card companies had commonly used for college students. However, many critics are claiming that the CARD Act has not accomplished its goals.

Although the CARD Act made it illegal for credit card companies to market directly on campus and offer free giveaways to students who apply for a credit card account, the credit card companies found a way around the law. Instead of handing out coupons for free pizza and gift cards on campus, they simply use those same methods just a few blocks away from school campuses. The law also made it illegal for companies to offer credit cards to anyone less than 21 years of age without a co-signer or proof of sufficient income; however, the card companies found a way around this by permitting students to list their loans as income.

Currently, as reported by the Federal Reserve, three-fourths of students have a credit card and have more than $3,000 in credit card debt. Texas students would do well to shop around for a card with the lowest interest rates. Paying off a credit card balance in full at the end of each month is considered the best financial strategy to avoid what could soon become overwhelming debt. And while the hope is that young people will graduate from college free from burdensome credit card debt, those who are victimized by offers that seem too good to be true have the option of bankruptcy and other debt relief alternatives to confront financial obligations that have skyrocketed out of control.

Source:, "Study: Students Remain Targeted by Credit Card Companies," Alicia Cormie, May 30, 2012

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