Selling Students Credit Whats Next Life After High

Selling Students Credit

What’s Next? Life After High School

Why Students Use Credit Cards • An increase in college costs and a decrease in families’ liquid savings leads to a dependence on loans & credit cards. • Students have a cognitive disconnect between the: – Reality of their current incomes vs. an affordable lifestyle

More Reasons Why Students Use Credit Cards • Students want their parents’ lifestyle BUT don’t have the same financial resources. They depend on: – – Financial Aid Families Part-time work Credit Cards

Consumption and Credit • Students don’t embrace “old school” financial values • Consumption pressure and easy access to credit • Increased social acceptance of debt • Credit is a reward

Long-term Effects of Credit • Graduate with: – Student loans – Credit card debt • Affect credit score • Harder to get: – – Car loan or insurance Apartment lease Mortgage loan Job

College Students’ Money Problems

Credit Card Use by Year

Credit Cards: The “Other” Drug • Marketing of credit cards on campuses poses a greater threat than: – Alcohol – Drugs – Sexually transmitted diseases • Students with high credit card debt are more likely to: – – – Earn poorer grades Drop out of school Suffer from depression File for bankruptcy Work more hours to pay bills • No job? • No income? • No problem? • If you are a student, you will be approved!

Credit Cards Offers Everywhere • • • Bookstore Cafeteria Athletic Games Student Union Offer Free: – CDs – T-shirts – Water bottles

Mutual Benefit for College & Credit Card Company • Access to unsaturated market – New students every year • Credit card companies pay for: – – Sponsorship of Events Renting Tables Affinity Cards Student Clubs

Preparing for Managing Credit on Your Own • Work income • Allowance income – Live on a budget at home • Food • Entertainment • Clothing

Managing Money in College • Don't spend more money than you have • Divide spending into: – Needs - Quarters for the laundry machine – Wants - $1, 800 for a spring break trip to Florida • Don't pay for the wants unless you can cover the needs

Managing Credit in College • Get one credit card – Authorized user on parents’ card – Ask parent to cosign card – Secured Card • Pay off the balance every month – Be aware of intro APRs vs. annual APRs. • Don’t take cash advances • Pay on time

Authorized User • Primary cardholder, not authorized user, is legally responsible for the bill • Your credit score and report will reflect the primary cardholder’s actions to your: – Benefit – Detriment

Co-signer • Legally responsible to pay consumer debt if borrower defaults • Your credit score and report will reflect the co-signers actions to your: – Benefit – Detriment

Secured Card • Establish by depositing money into an account. • Security for card if you don’t pay • Make sure card issuer reports to credit bureaus • All have annual fees, but not all have application or processing fees. • Move to a credit card after one year

In Memory of Mitzi-Ann Pool • Freshman at University of Central Oklahoma • Worked part-time • 3 credit cards • $2, 500 in debt • Hung herself on 12/09/1997 – Had credit card bills spread out on bed

In Memory of Sean Moyer • Junior at University of Oklahoma • Worked as part-time salesman at dept. store. • 12 credit cards • $10, 000 in debt • Hung himself on 2/12/1998

Success Story of Jason Britton • Graduated from the University of Georgetown • By junior year had: – 16 credit cards – $12, 000 in debt • Paid off debt by: – Working 60 hours per week – Continuing with studies