Hilal Nakiboglu: Lessons in plastic learned the hard way

I spent too much this past month. Spent money I technically didn't have. Dutifully, I purchased overpriced boxes of chocolate truffles and shower gel gift sets. I listened as the Gap told me to "give color" for the holidays. I gave it in the form of sure-to-shrink sweaters and itchy looking scarf-and-gloves sets. Now, a few short weeks later, I am left with nothing much to show for my efforts except a few convalescent wrapping paper cuts and one disturbingly long credit card statement. I know I'm not the only one. Trying to be a careful spender is tough this time of year. It is especially so for those of us on a tight student budget. Too often, using a credit card presents us with an easy, dangerous way out. Undergraduates especially are carrying credit cards in record numbers today. According to a 2001 report from student loan firm Nellie Mae, 84 percent of college students have at least one. Card acquisition is a gradual process for many students. While only 54 percent of entering frosh have access to a credit card, that number jumps up to 92 percent by the end of sophomore year. Alarmingly, students triple the number of cards they use and, in turn, double their credit card debts by the time they leave campus. National averages say a graduating student will have racked up over $20,000 in combined credit card and education loan debts during her time in college. The consequence of all this? A study put out by Harvard Law School suggests that in 2000, roughly 120,000 people under the age of 25 filed for bankruptcy. This number has seen a steady increase of 51 percent over the last decade. The burden of heavy debt proves crushing for some college students. Tragically, a Central Oklahoma undergraduate, Mitzi Pool, killed herself in 1997 after accruing just over $3,000 in credit card debt. Having hung herself with a bedsheet, Mitzi was found in her room, checkbook and outstanding bills spread out on the bed below her. Stories such as Mitzi's have caused some public figures to spring to action -- among them Congresswoman Louise Slaughter (D-N.Y.). Two years ago, Slaughter surprised members of the House when she defiantly littered the floor with a container's worth of campus credit card advertisements and applications and said, "Credit-card issuers are raining down solicitations on college students." Slaughter and her supporters contend that students under 21 ought to have their credit lines limited to 20 percent of their total income. To exceed this amount, students would need to have an adult co-sign their applications. While certainly a well-intentioned proposition, would the capping of credit lines really provide the answer here? Surely, people who are granted the right to vote, drive, work and even marry should be allowed to manage their finances as they see fit. Further, the argument that clamping student access to credit prevents "real world" financial experience is also a convincing one. Just as students experiment socially or with alcohol and other drugs, shouldn't they be allowed to make their own financial decisions as well? Even if these decisions turn out to be mistakes? Arguably, had I not been given ownership of both a charge card and the serious responsibilities that go along with it, I would not have gotten a taste of the unpleasant consequences of careless spending. Today, I know to budget more carefully, especially around the holidays, in part because of the lessons I learned as an undergraduate with a Visa card. However, if these life lessons lead to serious credit ruin, damaging levels of debt or, as in the case of Mitzi, desperation, card ownership should be reconsidered. Alternative forms of plastic are out there. Those that act as reloadable debit cards might be explored as a safer segue into the world of credit. Further, tips on how to be a more prudent student spender can be found on Web sites such as www.campusblues.com or www.youngmoney.com. Having a credit card can be a powerful proclamation of independence. Gone are the days of waiting for your allowance and getting parental advice on what you should buy with your money. Yet, we should exercise this form of independence with care. Only by being mindful of our spending can we keep legislators' hands off our rights and out of our wallets. Hilal Nakiboglu is a second-year doctoral student in Higher Education Management from Ankara, Turkey .

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