Plastic Replaces Greenn in Student’s Pockets

College students nationwide are putting the green out of style with their increased use of plastic-that is, replacing cash with credit cards. However, as Diana McCabe warns in an article in The Orange County Register, “A credit card is not just a piece of plastic. It’s a source of real money that you have to pay back. It also can be a source of financial headaches.” Nellie Mae, a student loan company, reported that 42 percent of college freshmen and ,on the opposite end, 91 percent of final year students have at least one credit card, in a study published in 2005. “Financial institutions are swarming over college campuses,” writes Jane J. Kim in an article in The Wall Street Journal. “Young adults tend to be very loyal to their first card,” Kim reported Ed Stolbof, the senior vice president of marketing for Morgan Stanley’s Discover Financial Services, LLC, as saying. “It’s really important to get to card members as soon as we can in their credit life cycle.” What is so attractive about plastic? One answer is found in the cards that Bank of America offers for students, giving them choices of either a card featuring the logo of their major university or one that features a personal photo. In addition to the aesthetic temptation presented by bank cards, Kim reports banks have given away iPods, packs of coke and airline tickets for students who open new checking accounts. These cards are not just collecting dust in student’s wallets and purses either. College seniors carry an average credit card balance of $2,864 – an increase from the average $1,585 that freshmen carry, according to Nellie Mae. In the same study, the number one reported usage of credit cards by 74 percent of students was for school supplies, such as paper, notebooks and other supplies. Tied for second was textbooks and food. Even though Nellie Mae reports students from the northeast as having the lowest outstanding credit card balances, UVM students – especially freshmen – should tread the credit card road with care, lest they leave college with more than just a student loan to worry about.