Final

Thesis Statement: Credit card companies should not be on campus marketing to college students because not all college students know the background or purpose of credit cards, credit cards could lead to debt, and students have too many cards. Credit Card Companies Marketing to College Students on Campus Imagine how many credit card offers does are received after becoming a college student; Then consider how many credit cards will be in his wallet by the time he graduates from college. College students are faced with many decisions including whether or not they want a credit card. One key factor that should be considered is whether he can be responsible after receiving a credit card. Credit card companies see an opportunity when approached by college students so they tend to market credit cards on campus. Credit card companies should not be on campus marketing to college students because not all college students know the background or purpose of credit cards, credit cards could lead to debt, and students have too many cards. History and Background of the Credit Card People who do not know the history or background of credit cards tend to misuse them. Credit cards have been around for the past three to four decades. Frank McNamara of New York’s Hamilton Credit Corporation came up with the idea to give businessmen a way to charge business-related expenses in the 1950s; the first plastic card was issued in 1955 (Allen, 2010). Initially, the standard for retrieving a credit card was so high that everyone could not obtain a credit card; since then the standards have been lowered and allow 18-year-old college students with no income or credit score to retrieve a credit card (Gudmundsson, 2008.) (Allen, 2010) Credit cards allow people to purchase items without using cash. Instead, they are to make purchases by using money that they have not yet earned. Consumers can charge items and pay for them later (Allen, 2010). Credit Card Debt in America Credit cards were initially believed to be a good idea until it brought other problems such as debt. They are one of the leading causes of debt in Americans. (Gudmundsson, 2008) The amount of debt for many American families is in the trillions. In fact, the average American family has up to $9,000 in debt and pays around $1300 a year in interest payments. One main concern today is that the interest rates and fees are steadily going up which is not very helpful for those already behind (Gudmundsson, 2008). Credit cards enhance spending habits more than it would if the consumer were using cash (“Bankrate.com,” 2010). According to Hoffman, Brinker, and Roberts, the average credit card debit per household is about $15,700. In 2010, the US Census Bureau reported that US citizens have over $886 billion in credit card debt and that amount is expected to rise to $1.177 trillion by the end of this year. Each card holder has an average debt of $5,100 and numbers are expected to reach $6,500 by the end of the year. Studies show that only 54% of Americans pay their balance in full each month whereas the rest make just the minimum payment. In addition, 33% carry a balance up to $10,000 and 13% carry a balance over $10,000. Many consumers complained that credit card companies mistreated them and 32% have paid their credit cards and closed their account since 2008. Only one third of Americans do not own a credit card (Hoffman, Brinker, & Roberts, 1999-2010). Possessing Multiple Credit Cards One cause of credit card debt is having too many credit cards. Acquiring more than one card is fine, but having more than three could lead to problems. (“Bankrate.com,” 2010) Acquiring too many cards makes it easier to lose track of the different bills which could cause the student to get behind in credit card payments. When the payments get behind, late fees may be added and the interest rate could also be increased. This means more paperwork and paying attention to more transactions. Not knowing which bill is due and when the bill is due could even leave some of the credit card payments unpaid. To top it all off, some credit cards come with annual fees and more than one card could mean more annual fees to be paid each year; this is simply a waste of money with each of the annual fees. Students with multiple cards are more likely to over-spend. The increased temptation associated with higher credit limits could lead to overspending. Additionally, a wallet full of cards could be a hassle if the wallet is lost or stolen; the owner would then be responsible for canceling each of the stolen cards. If someone else gets a hold of the credit card that could mean more problems such as maxing the credit card out and adverse effects on the owner’s credit report (Bankrate.com,” 2010). Credit cards are intended to help make life more convenient, but could cause more problems than they are worth. Knowing the background of credit cards and what the purpose of the invention of the credit card can help with using them wisely. Credit cards are beneficial to some and could cause others to be in debt. Since credit cards are one of the leading causes of debt for Americans, it comes with tons of responsibilities as well. Understanding the fine print and all other details pertaining to the credit card could also help. No one knows fully of the wise ways to use a credit card until either doing the research or using one on his/her own. I found that learning full extent of the credit card helpful when deciding whether or not to retrieve a credit card. College students may want to look into owning a credit card before retrieving a credit card. College students may not be yet wise enough to make such life-changing decisions, and therefore, credit card companies should not be on campus marketing to college students. Work Cited Allen, Tom. (1999-2010). I hate debt.com. In History of the Credit Card. Retrieved November 16, 2010, from http://www.Ihatedebt.com/AlookatDebt/HistoryoftheCreditCard.php Bankrate.com. (2010). MSN money. In Why you need multiple credit cards. Retrieved November 17, 2010, from www.articles.moneycentral.msn.com/Banking/CreditCardSmarts/whyneedmultiplecreditcard.aspx. Gudmundsson, Inga. (2010). Oppapers.com. In Credit Card Debt in America. Retrieved November 17&18, 2010, from www.oppapers.com/essays/credit-card-debt-America/178034. Hoffman Brinker and Roberts. (1999-2010). Hoffman Brinker and Roberts. In Interesting Credit Card Debt Statistics. Retrieved November 17, 2010, from www.hoffmanbrinker.com/credit-card-debt-statistics.html.