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May 15, 2010


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Financial education begins at home. Of course, if parents are fiscally irresponsible, it's no surprise that their children learn bad money habits.

The CARD Act is a good start. What really needs to happen is to ban credit card companies from college campuses entirely--no ifs ands or buts. The reason they cater to college students is that a credit card is a rite of passage into adulthood. It leads one to assume you are a mature person. Ah, the tangled web of deceit that is advertising.

And never mind keeping parents in the loop so they can pick up the credit card bill when the kid doesn't pay. How about parents saying "NO" or "Get a job" rather than co-signing for their kid's indescretions.

I don't think we can say that college students are childlike, naive, especially idiotic, or that they should be a protected class.

Rather, young people in college have brighter futures and are usually more intelligent and have more resources than their peers who are not attending college.

College students are also mostly above the age of majority. They can join the army without parental permission and kill people, for example. They are usually 18 or 19 to 23 or 24 or older. They are not children by any means.

It is also clear that many adults not in college and of many different ages are financial idiots--taking out loans with ridiculously high interest rates, and mortgages they cannot pay, and overspending with credit cards.

Perhaps we should institute a "moron" law? That stipulates that anyone who is an idiot can't take out a loan or have a credit card?

I favor instead encouraging *everyone* to be careful and make good financial decisions, or live with the consequences.

A "special" law for college students doesn't make any sense at all.

Yup, I take insult when people group all college students together as stupid or irresponsible. That's just moronic in itself.

It is extremely important that college students do not begin their independent lives with a staggering credit card balance. Think of the implications for our society. While some students are fully capable of managing their finances especially with a credit card, these students are really few and hard to find.

Highly debatable concept but very informative article.

"In 2010 more than 80% of all students carry a balance of over $2000." Really? I don't believe that.

I also do not support more government intervention to tell us what they think is best for us. We don't need a nanny state. The problem is when people vote to re-elect representatives in congress that are in favor of big bailouts.

The big banks knew they were too big to fail. They took risks that they otherwise would not take in a truely free capitalistic economy. Now, we, the tax payers, are suffering.

If the credit card companies want to lend money to students without incomes, then let them. But when those students cannot afford to pay the balances back, DO NOT bail out the lender.

When you talk about a bailout, it's hard to put aside why college students were traditionally a great marketing target for card issuers. Not only because of their financial naivety resulting in huge interest and fee revenue, but also because the card issuers counted on a virtually guaranteed bailout in the face of defaults. Not from the government mind you, but from the Bank of Mom & Dad outside the realm of legal responsibility for the debt.

As a student, it's a really sweet deal when (unsupervised by your parents) you only had to cough up perhaps $15/month as a minimum payment on your own account while continuing to run up hundreds of dollars of fun & games expenses month-after-month. The student may have also had his parents' credit card for authorized purchases--books and emergencies, which the parents had no problem covering. The interest rate and accumulated balance on the student's card not only were meaningless to the student, they were unknown to the parents until the damage had been done.

That's where the BMD bailout would come in--typically knowing nothing of the student's credit card account until months or years later, when the credit line is maxed out, the creditors are knocking on the student's door, and the larger minimum payment is no longer manageable. Hard to say no when your student hits you up at just the right moment--like immediately after presenting you evidence of some academic honor. "Oh, yeah, there's something else I need to tell you about."

There were always students who handled their own credit cards responsibly or paid their way through college entirely on their own without parental help; there were always parents who thought it would be more appropriate to let the student deal with the consequences of their spending. What's different now is that a lot of branches of BMD simply no longer have the means to provide a bailout in this economy...especially when their kids are in college.

i defintiely dont think banning credit cards from campuses is the way to go, we need to teach students how to use cards the right way. why ban them, and once they graduate give them access to credit with absolutely no exprience on how to use them the right way. all we would be doing is avoiding hte problem until people graduate college. we wouldnt be fixing the underlying problem, and that is personal finance education that should be part of every high school curriculum. I used a credit card throughout college, no balance, always paid off. and like mentioned above, let the lenders fail if they give credit to students who dont deserve it.

This has probably changed greatly in the last few years, but I recall reading a survey where 50% of college grads from certain prominent universities expected to be millionaires within 5 years of graduation. No wonder many of them thought that a few grand in credit card debt was no big deal. Parents need to teach their kids about having realistic goals and planning accordingly. That should not include hoping that you win the lottery or create the next big startup.

My parents drilled into my head through out high school to pay my balances off in full every month and that I shouldn't buy anything I cannot afford to buy in cash (excluding home purchases obviously).

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