Opinion> Brian Till> Pay It Plastic Generation

	27 Jan 2010 The Dysfunctional Marriage In April 2001, a green and inward-looking American president had to deal with his first foreign policy crisis:… Read More.
	20 Jan 2010 It Gets Loud It begins modestly enough, with Jack White, a famed if not infamously gritty rocker, rigging together a piece … Read More.
	13 Jan 2010 Martin Luther King Jr. Day If there's anyone out there arguing about the impact of electing a black president on this nation's African-… Read More.

Pay It Plastic Generation

My generation has strayed a great deal from the tightly managed finances that our parents observe — ask a 20-something to balance a checkbook and they'll likely stare back at you. It's doubtful they have one, but if they do — and manage to find it — they'll probably ask how to turn it on.

At most colleges today, kids are inundated with credit card offers. Every trip to the mailroom is accompanied by the tease of having a few hundred extra bucks at your fingertips. It's a temptation many can't resist.

Even the most basic college social life has come to require a level of affluence. Social expectations mandate that students go out for dinners now and again, throw down cash for parties, cable TV, events on campus, and for rounds of drinks when nights inevitably end at a bar. My generation's largely grown up comfortably, the economic surges of the '90s and the credit boom putting luxuries once reserved for the wealthy squarely within grasp of even the lower middle class.

In college, kids often find themselves trying to maintain that lifestyle, if not advance it, albeit without the help of their parents. The common denominator of social interaction in most colleges has become obscenely high, given the income and savings of most students, and most find themselves scrambling to keep up with a pace that no one's quite sure who set.

College students, we should remember, are almost always completely unqualified for the credit cards they are handed: They have no credit histories and little to no income, yet gold and platinum plastics are churned out in their names as if they were Fortune 500 executives.

Before a House Financial Services Subcommittee last month, Travis Plunkett, legislative director of the Consumer Federation of America suggested the cause for such a practice: Penalty fees, he offered, which previously served as a deterrent for irresponsible spending, have greatly expanded in recent years and "become primarily a revenue enhancer for credit card issuers."

Thus, trapping college students — who are unlikely to amass the massive debt that chronic credit card abusers might — is a surefire way to profit from late fees, without assuming a great deal of liability.

Brad Thurman, a University of Illinois student government leader, testified — as members of my generation well know — that credit card companies do not adequately explain the terms when marketing cards to college-age consumers.

According to Student Monitor, a Ridgewood, N.J.-based marketing research firm, 44 percent of all college students are offered credit cards when they open a checking account — which nearly all do when they enroll — and slightly less than half accept. The average monthly amount charged on students' credit cards ranges from $163 on MasterCard to $236 on American Express. According to the most recent figures, college students' credit card debt totals $357 million.

For many, the debt can becomes prohibitive, after accruing interest. According to the Federation of State Public Interest Research Groups, more than 23 percent of all four-year public and 38 percent of private college graduates have too much debt to manage as a starting teacher.

But even for those that avoid subscribing to the debt demons, it's likely they deal with plastic far more often than cash, which contributes to our lack of touch with monetary matters.

As a roommate put it: "If I need to buy shampoo and I pay with a card, I'm gonna grab some beef jerky and some other crap, too. What's the difference of a few bucks? Charge it. But if I pay cash, I'll just buy the shampoo. Otherwise, I have to literally watch the dollars disappear."

When we do get paid, it's almost always direct deposit. We never see money going in, just as we rarely watch it going out.

While it would be great to mandate that banks apply stricter standards informing consumers, and limit the fees students are sacked with, such regulation isn't likely to come about.

An answer may lie in England, where at universities students benefit from financial centers — similar to job placement centers — where government-trained moneydoctors provide students with the knowledge and power to control their finances. Budgeting and student loan advice, finance management guidance, credit card and debt information; it's tough to imagine, controlling a financial life we didn't even realize we had — let alone that it had spun out of control.

Brian Till can be contacted at brian.m.till@gmail.com. To find out more about the author and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

Comments

1 Comments | Post Comment

Sir; I hope you can see what a fluffy sort of piece you have written here. I don't think you grasp to what extent this whole nation has been forced to rely upon credit, and how much it has drained this country's wealth into the hands of the rich. When people are not paid enough to save they must borrow for every emergancy. When the country fails to secure its revenues from those with the resources, it must borrow. Jefferson warned against deficet spending, thought it would encourage adventures and wars with the cost laid upon the backs of working people. But what can you do with a government that dares any country on the planet to war with us; but does not dare ask the wealthy to pay their share? We have to buy property, and the government subsidizes high interest by not taxing it. I saw once where I was paying three times the price of my home with the interest. But, if the government taxed property, no one would hold it for speculation or as a bank of wealth. If the government taxed the same property that once supported the entire government, people would have plenty of wages to buy property with because the property price would decrease while wages increased. Look at the situation: We cannot live without interest, and credit. What is that leaving our children? I mean; in every generation past, one generation cut the trees and started to farm, the next took the farm, and built a house, and the next built a barn with the wealth of one generation passed to the next. We are far beyond that point. Now, no generation has anything left for the next. We have been robbed of our investment in the future to pay interest: Look at what the government is doing with free cash. They are trying to prime the pump because all actual money has fled this shore as capital or is in the hands of the rich. When this priming was first attempted, there was still much property in working hand. By increasing the liquidity of wealth in society; property and commodities both began to move. The thing is; no one in the working class is sitting on a bundle. No one today is sitting on the capital improvements of generations passed. All we have now is our dead end jobs, and they don't pay much interest. But, the interest they do pay is the wealth of the nation drained into private hands. For the pump priming to work, we would all need some wealth in property. We are all on some sort of reverse mortgage that will eventually leave us with nothing, and with nothing to leave our children. You can talk about school kids as irresponsible with credit. Fair enough; but the price paid for an education leaves many graduated with a mountain of debt. And it is a terrible moral message, because the whole of society should benefit from educated people, and should help to pay their expense. Instead, people graduate with the entire burden on them, and feel they owe nothing to the society, and they really don't owe much. But if we wonder at the moral terpitude of many business people we need look no further than an education that saddles them all with debt, and forces them into wage slavery, where out of their want, they are forced to pay interest. Seriously, we are drained by interest, people and government alike; and some are recieving what we are losing. Thanks. Sweeney

Comment: #1
Posted by: James A, Sweeney
Thu Jul 24, 2008 8:54 PM