Cost of Peer Approval at College

Lack of financial status brings with it powerful emotions. When faced with this kind of financial inequity, some students remain isolated from peers or drop out of school completely. But others find a solution to the problem by getting one (or more) of the credit cards that are advertised all over campus. As adults, we are generally able to say, "I'm not going out tonight because I just can't afford it." But the need to belong is so strong at college, and the credit card is so easy to acquire and use, that many students remain socially popular"and get in way over their heads.

College students are prime targets for credit card companies, which set up tables on campus and entice students to sign up for new cards with promises of free tee-shirts or other enticements. An average college freshman is offered eight credit cards in his or her first semester. The average graduating senior has six cards in his or her name, and 31 percent of these seniors carry a balance of $3,000 to $7,000.¹⁰ These kids know they're in financial trouble, but don't know how to pay down the debt and still keep up appearances.

Matt's parents were shocked when he told them about his first credit card bill. "Matt charged $400 in his first month as a freshman," remembers his mom, Tracy. "My first question was why any bank would give this boy a credit card!" Matt explained to his mom that when he was buying his books, he was told that if he filled out a credit card application, he could have a free dictionary and thesaurus. So he figured, "Why not?" Then with his new credit card in hand, he felt free to decorate his dorm room, buy some CDs, and treat himself to a new pair of sneakers. Tracy was not amused. "I took his card and cut it up with scissors and placed it in an envelope with the $400 payment. I explained that when my son had a job and a bank account, I was sure he would be happy to have their credit card, but until that time, he would not be using the card again."