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Credit Card Debt Issues Essay

When it comes to the issue of credit card debt, no group gets hammered more when it comes to racking up debt upon debt more than college students. College students simply do not show fiscal restraint when it comes to credit debt and this is a major reason why credit card companies will target students. While this is a somewhat unethical approach to business, it has long since proven a successful business practices for the lenders because students are not aware that they are paying incredibly high interest rates in order to perpetually purchase luxury items that they really do not need.

So, in that regard, one could make a credible argument that the reason students rack up such debt is because they are psychologically addicted to consumerism and this addiction is not balanced by an understanding of the financial consequences revolving around high credit debt. No one wants to have less than someone else. While having want or desire in regards to basic necessities such as food, shelter and clothing is a complicated issue, the desire to want items and things that are of status and luxury have a more seductive quality to them.

The reason for this is that when

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it comes to items of necessity such as food, we do reach a limit at some point to where we are “full. ” While some people are gluttonous by nature, most individuals know when to say when in regards to eating. When the item at hand is a DVD collection, the ability to “say when” becomes somewhat murky because there are a number of media influences that press the concept that owning the largest, most expansive DVD collection is the thing to have. When it comes to luxury, there are perceivably no limits. Or so it would seem. Credit Card Debt Page 2

Students do not realize that the interest rates that are associated with credit cards that target students are much higher than what one would normally pay. Since the students are not aware of lower interest rates nor are more reasonable credit card companies targeting students (and with good reason – fear of default) so the students swallow up these cards, which are primarily pre-approved cards that are provided knowing full well that the students will quickly amass huge debts after a series of spending sprees that will eventually be paid off by the students parents.

Again, the true villain here is the psychological reaction college students have towards material things. Far too often, a person is judged based on the external as opposed to more substantial means. Because of this, there is a ‘need’ on the part of the students to wallow in material items that will bring a sense of outward self worth. (There is no conceivable way these items can create internal self worth.

If anything, love for such material items will reinforce a lack of self esteem) Ultimately, the question needs to be asked, what is a student to do to avoid credit card debt? At a baseline level, the student must realize that the problems inherent from going on purchasing sprees will be a thousand times more harmful than any perceived benefit that can be found in irresponsibly running up credit card debt. The hassles that will derive from having to pay back a mountain of debt will cancel out any perceived benefit that such purchasing could ever possibly bring.

On a deeper level, there needs to be an understanding that whatever personal needs that the purchasing of material and luxury items meets exists strictly on a Credit Card Debt Page 3 psychological level. That is to say, there is no real need being met other than fulfilling desire and when the student realizes that by changing one’s outlook or state of mind on the subject of excessive purchasing can have the benefit of eliminating the internal desire for making a needless purchase.

Also, there needs to be responsibility taken by colleges in order to curb the solicitation of high interest rate cards to students. Colleges have a very ignoble tendency to open their doors to solicitors of these cards. As such, the colleges are complicit in the fleecing of the students, which is the ultimate goal that these credit cards offer. Pressure needs to be put on colleges not to help promote such irresponsible lending practices. This is not to absolve the student from responsibility however.

Ultimately, it is the student who is responsible for his or her actions and must use common sense and restraint when using a credit card. Of course, students are human and make errors and some of these errors can be costly. If a student does run up huge debt, then it is best for the student to buckle down and take the steps needed to get out of the hole the student has dug. If the student has learned from the errors, then hopefully he or she will learn to avoid making the same mistakes in the future.

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