Credit behind the cards

Luckily, Kay Cole has a sister generous enough to pay $1,000 to save her name, if not her future. Her financial future, that is.

While Cole’s first taste of plastic cash, a Capital One Visa card, has been paid off, the senior English major is still paying her second Visa, in addition to reimbursing her sister $1,000.

College students can apply for credit cards through mail, email, telephone, or personal solicitation, but they can not sign up on Northern Kentucky University’s campus.

Credit card solicitors are prohibited at NKU and, in order for a credit card company to approach students on campus, they would need to be sponsored by a school organization and retain permission from the Office of Student Life.

According to Steve Meier, Associate to the Dean of Students, “that would not happen.”

“I don’t think students are fully aware of the consequences,” Meier said. “Some [students] use it without realizing the full consequences of running up debt, interest rates, and paying off debt.”

“Personally I think there should be a class or seminar [for students to take] when a credit card is applied for,” added Meier.

In addition to enforcing the strict solicitation limits on NKU property, the university holds the personal information of the 14,000-plus students enrolled out of reach of creditors.

“NKU does not sell personal student information. If someone doesn’t indicate a privacy stipulation [for the website directory], anyone can get that information. We do not sell names,” Meier said.

Deidra Fajack, Director of Alumni Programs, said NKU solicits only to alumni who apply. “The companies we work with are typical affinity partners. We see it as providing a service, not necessarily as a huge money maker. The plan with the new credit vendor…will just be focused on alumni,” said Fajack. “We don’t give out information to anyone.”

Although the alumni solicitation rules are less strict, no creditors are ever invited or permitted on the Highland Heights’ campus. But, even with restrictions, some companies still send representatives to NKU in attempt to find new applicants.

“In my experience, [solicitors] have set up shop on campus, away from the University Center near the Fine Arts building,” Meier said. “They come in unannounced, they bring their own tables and provide free T-shirts. I get a phone call and I tell them they need to leave.”

According to Meier no solicitors have ever refused to leave, but, if they did, “we would have to call the NKU Department of Public Safety.”

According to a 1999 study, approximately 70 percent of undergraduates at four-year colleges possess at least one credit card. Among those students who don’t pay their entire bill each month, the average debt balance is more than $2,000, with annual interest rates as high as 20 percent.

Many universities hold contracts with creditors in which the institution receives a significant payment in exchange for permission to set up tables on campuses and obtain student’s contact information.

The Student Credit Card Trap study, conducted in 1998, found that students who received cards from campus solicitors had higher unpaid balances than students who received their cards from elsewhere. Those students were also more likely to carry a balance from one month to the next.

General knowledge about interest rates, how credit cards work, and reasonable use are key elements to understanding credit and avoiding debt. The Public Interest Research Group (PIRG) offers these tips on using credit responsibly on their website ( pay on time, since paying even one day late will result in a fee; pay more than the minimum to keep the banks from extending payments and racking up interest; know your credit limit and keep track of charges, stores won’t always decline a maxed card, and going over the limit will also result in additional fees; and don’t get cash advances, since rates are always high (near 20 percent) and interest is charged the day you receive the money.

There are certainly benefits to obtaining credit cards as a student. If payments are made on time, other lenders see responsibility; and cards also help students establish good credit history before they enter the work force. Good credit history can make it as easy for a student to get a car or home loan, while a bad credit history can hinder such opportunities.

But while some can handle the sudden monetary responsibilities acquired as quickly as a signature is endorsed onto a credit application, others are not so ready. NKU junior Jeff Moore spent last summer, enduring hard labor at a packaging factory in Covington to reimburse his father for a $2,500 loan to pay off his Visa.

“I should have listened to everyone when they all said to “cut it up,” Moore said. “I always learn the hard way.”

Moore acquired his first credit card through the mail when he was 19, but said his money management skills have improved and he is now down to one card from three.

Moore has seen several of his friends fall victim to the harsh realities of bad credit and debt as well, but thinks it is all right for college solicitation as long as they [students] realize the potential danger. Does he think most do? “They will.”