Be wary of credit cards

megan.keller and megan.keller

Last year, someone randomly gave me a coupon for a free Subway sandwich outside the library. I thought it was my lucky day-until I reached the fast food eatery.

Inside were two suited credit card representatives from Citibank on an apparent college tour. My coupon was nothing more than a piece of paper. If I wanted to eat, I had to sign up for a credit card.

Initially I stormed out and walked down Presque Isle, angry that credit card companies were stooping even lower to win my affiliation. I just wanted a chicken sandwich. Apparently filling my mailbox with solicitations wasn’t enough anymore. I wondered why more students weren’t angry-there was a horde waiting to sign up. My hunger won over my morals and I grudgingly signed up, figuring I didn’t have to activate it after all.

Or so I thought. I was issued a large bill for my summer apartment storage three months later. My first card didn’t have enough credit left to cover the payment, so I activated the sandwich card. And my slow decline into debt began. It’s kind of like a credit card mafia; “I thought I was out, but they keep pulling me back in.” It’s easy to fall victim to massive debt.

I use my credit cards when I have to-for things I cannot pay with cash without going bankrupt. While I only use them now for some bills and car repairs, I’ve used it in the past for food, books and the occasional shopping spree (feeding my eBay addiction). In fact, this year I’ve tried not to use them at all, with the worthwhile exception of my Bonnaroo ticket. Students use their credit cards primarily for school supplies, according to a 2004 study by Nellie Mae, an originator of student loans. In second place was textbooks and food. Slightly less than 24 percent reported using their cards for tuition.

Nevertheless, by the end of this week, both of my cards will be more or less maxed out. (Sorry, Mom and Dad.) While I was swimming toward the black, I’m now deep into the red. Now, I’ll have to start paying all over again, but I’m sure my credit limit will magically expand and cause further debt.

I’m not the only one with debt. According to the Nellie Mae study, 76 percent of undergraduates began the school year with credit cards. The average outstanding balance on undergraduate cards was $2,169. Add the hefty amount of student loans most students have and they’re in a pit of debt.

It’s easy to just make the minimum payments-for example, my Citicard’s minimum payment is $20-but with interest rates and various fees, making the minimum payment won’t get anyone out of debt. If I keep paying $20 a month on a credit card with a limit of $1200, I’d pay off that card in 5 years- finance charges notwithstanding provided I don’t use the card again. And as the provider keeps extending the credit limit as the amount increases, it could take years to pay off. By the time I manage to pay off my two cards, I’ll probably have paid more than double in interest. At this rate, I’ll be 30 and still paying off those pizzas I bought sophomore year.

It doesn’t help that students are magnets for solicitors, which is unsurprising, given the amount of junk mail I get. I receive many credit card solicitations a month, sometimes multiple ones. I even get credit applications from Northern, as if they didn’t have enough of my money already. This kind of mail solicitation is the no. 1 source for credit cards according to Nellie Mae. These companies’ shenanigans are incredible, since now they’ll stoop to sandwich trading to ensnare students.

A credit card can be beneficial at this time in life, with unexpected emergencies and even expected problems. Without a credit history, students cannot rent a car or (possibly) rent or buy a house. As these problems probably affect graduating seniors more than freshmen, it’s no surprise that 91 percent of students in their final year have a credit card compared to 42 percent of freshmen, according to the Nellie Mae study. While I may be deeper in debt than the Titanic, at least it’ll be easier for me to buy a house or lease a car than my credit-free peers.

However, that Subway sandwich wasn’t worth it in retrospect. While it may have been free, it’s cost me roughly $1,100, which will take me quite a while to pay off. It should have been gold-plated, or have tasted better.