Zhou Qiong (senior finance practitioner)
Website of sale of American some credit card (Www.comparecards.com) go up an advertisement article March 8, 2019 " best undergraduate credit card " (Best Credit Cards For College Students) , piece write: Do you think you do not need credit card? Think again. A lot of undergraduates are relied on borrow write down card, shift pays or cash. But having a problem is, with this kind of terms of payment you did not establish credit record. Graduate from the university when you, the likelihood needs credit record to rent a house, buy novice machine or apply for a car to borrow money, potential employer inquires your credence reports possibly also. You begin earlier to use credit card, more can early begin to build credit to record. Good credit record means you to be able to not enjoy lower loan interest rate.
This is convincing word art really.
But, still do not have the undergraduate of ability of how many income, cannot use borrow the keep expenditures within the limits of income that write down card, and should use credit card to overdraw consume? Why credit record, cannot from there is formal job resumptive build? This one " early begin to build credit to record " say decline, it is the successful trade pattern that all sorts of credit orgnaizations and compose of join forces of the orgnaization that sign a letter establish really. But to the undergraduate, begin to use credit card early, may not helped them establish better credit record, heavy debt works on the back the amount to of repay a debt is not little, the application below extreme circumstance goes bankrupt and commit suicide also common occurance. Because this also caused the controversy of organization of hairpin orgnaization, school, parent, society, legislative, scholar and have a trial of strength.
20 centuries 80 time end, market of American credit card approachs saturation, hairpin orgnaization is extend credit card market further, aggravate to sub market (the client with credit inferior grading) the competition with undergraduate market. Expectation student union has taller not countervail remaining sum; Because its risk level is higher, can place higher interest rate to them; And, the undergraduate is the crowd that anticipates income is higher; Practice shows the undergraduate is right the first piece of his credit card faithfulness is spent very tall (Ellingsworth, 1997) , when relation of the client since education is helpful for a student needing the finance such as car loan, housing loan to serve after graduation, continue to use this bank. Made today's money already to undergraduate hairpin, fostered prospective client again. Hairpin orgnaization flocks enter school yard, extend through the spot the means such as gift is contended for attract file credit card without the income, undergraduate that does not have credit history. The advertisement of credit card and the application form that mail continuously blot out the sky and cover up the earth in dormitory, dining room, classroom. At the beginning of 90 time, hairpin orgnaization cancelled the following person 21 years old to apply for credit card to want the current way of parental couplet arrange, adopt more radical sale measure.
90 time end, the problem that debt of undergraduate credit card causes begins to cause social attention. 1998, group of research of American public interest (PIRG) made an investigation to undergraduate credit card, basically have following result: It is most him student for credit card reimbursement. The student of 69% is with the individual name files credit card, the parental reimbursement that the student of 31% weighs them or assure couplet arrange its at least one piece of credit card. In the student of own reimbursement, pay off every months 38% , 16% return lowermost reimbursement specified amount only, 9% Chang Chi capture. The student of own reimbursement is average not countervail remaining sum is 968 dollars. 2 it is campus be being sold continuously is means of an important sale. The student of own reimbursement has 61% is the credit card that places booth spot application in campus in hairpin orgnaization, and of parental help reimbursement having 41% is to pass this kind of means to apply for. And obtain the student person of own reimbursement of credit card with this kind of means all hold calorie of amount (2.6 pieces) and not countervail remaining sum (1039 dollars) prep above either obtain card with this kind of means (mix 2.1 pieces 854 dollars) . 3 it is late pay issue more general. Of 28% suffer the person that visit to come in going two years rare late capture. And a lot of banks can are opposite inside a year late capture 1-2 second the castigatory sex interest rate of person collection 22-28% . 4 it is credit card education is inadequate, etc. PIRG offerred a few proposals to the school, student and congress, unless the student has gotten credit card education,be like proposal school, should prohibit hairpin orgnaization fills application form for the student and extending otherwise the practice of little gift, should not let hairpin orgnaization apply for an amount to pay fee to student group by credit card; Proposal student considers risk and earnings carefully before filing credit card, pay off debt as far as possible, hold gets stuck one piece; Proposal congress holds hearing, legislation to the problem of debt of student credit card that rises increasingly.
1999, american consumer society (CFA) initiate the media wide coverage to problem of undergraduate credit card, arouse intense social echo. People thinks the school should be in charge of providing a security, appropriate student learning and the environment that grow, and the experience of young, lack that hairpin orgnaization uses a student, without financial experience, excessive sale credit card, bring about an undergraduate to be opposite credit card overspend, appear leave school (with debt of full-time job countervail) , mental disease suffers from, go bankrupt, cannot find the job (because undesirable credence is recorded) even the serious problem such as the suicide. A student, read an university 4 years to come down, have 16 pieces of card, 21000 dollars debt. One works to also cannot repay the undergraduate of credit card debt commits suicide from time to tome 12 pieces of credit card, its family challenges angrily hairpin bank is how to be examined and approve send those who put these credit card. A mother, because the daughter committed suicide because of credit card debt 1997, strengthen the limitation of sale of pair of campus credit card in the appeal all the time. And hairpin orgnaization says these problems affect very young proportional student only (3%-4% ) , most person is need nevertheless debt is paid off after the job and.
A few universities are passed give certain hairpin the orgnaization with exclusiveness hairpin the right or issue card of cosignatory, self-identity, obtain hairpin orgnaization to the cent that give is become or be donated, the doubt that posed the part that the society acts to school authorities place (for example one bank of university and beauty signs Tian Na on the west, the issues cosignatory card contract of 16.5 million dollar, nevertheless the United States explains the main goal client that says them is student of alumnus and rather than) . Social all circles, especially father and mother of student group, student waits to use force to the university with the alumni association, the requirement prohibits the credit card sale inside campus. 1999-2000 year, many 400 university prohibited the credit card sale inside campus, still nearly 600 are considering similar restriction. Additionally a few universities teach the problem that will prevent a likelihood to arise through having credit to the undergraduate.
Nevertheless, allegedly a few claimed to prohibit the orgnaization of a hairpin that the school of sale of the credit card inside campus allows an autograph to make an appointment with only has sale, more inequitable. Some schools allow all hairpin orgnaization to enter, low to signing the place that arranges hairpin orgnaization to close in the sale inside campus to expend, close high to other hairpin orgnaization.
After 2000, hairpin orgnaization broke through limitation with all sorts of means again, policy limitation relaxes gradually, the credit card sale inside campus warms up once more (Fitzgerald, 2003) .
Apt of university management layer thinks credit card is the requisite of daily life, no matter be,actually in the sale outside the sale inside campus or campus it doesn't matter is distinguished (prohibit placing vendor's stand inside school for instance, hairpin orgnaization is in the school circumjacent) , the sale inside limitative campus is not real and not necessary, the key should be put on the credit education to the student.
The exceeding saturation as a result of market of American credit card (every person that hold card has 5 pieces of card on average at that time, hairpin orgnaization mailed credit card application form of the client to achieve 6.1 billion record-breaking continuously 2005, the rate that return case is low to 0.28% ) ; Undergraduate market has the student of a batch of new enter a school every year, cause client special concentration, sale cost is relatively inferior, profitability is good, hairpin orgnaization is rising to the enthusiasm of undergraduate market.
The take turns in the university that national hairpin orgnaization is in complete beauty every year has sale, the market went up to still the major that has sale of campus credit card for hairpin orgnaization serves an orgnaization. Top-ranking university is through allowing hairpin orgnaization inside campus sale (provide student data to hairpin orgnaization even) acquiring millions of dollars one year is very general issue. American bank is in after buying MBNA, have right of hairpin of the exclusiveness inside the campus that makes an appointment with at most with university autograph (700 universities) . Beautiful banner bank also signed many 200 (Kathy Chu, 2006) . Discovering card, Capital One, Magendatong to wait also is orgnaization of active hairpin of large student credit card.
Besides before application of straight mail, spot, still have updated sale kind, be united in wedlock with the photograph of a few course of the school for example (be like Hua Qi " credit teachs a project " , the one part that regards sale as course) , phone sale, email sale is more general also.
Is all things amounted to begin to undertake in the university the theme is from 1999 " are you well-advised credence consumer? " (Are You Credit Wise? ) credit teachs an activity. Dimension Sa was made with " the practical monetary skill in the life " (Visa Practical Money Skills For Life) the suits to be used to the undergraduate from the children before learning credence that is a problem and financial education tax.
Legislation suggests and carry out. American representative Slaughter was mixed 1999 mentioned for two times 2001 " undergraduate credit card protects proposed law " (College Student Credit Card Protection Act) , slaughter thinks, the undergraduate earns money finitely ability and the infinite cause client that consume ability to bring about them to become hairpin orgnaization, be immersed in serious financial difficult position to avoid them, answer hairpin orgnaization to make limitation. This one act is right to normal age (18-22 year old) , full-time extend in school undergraduate credit card makes demarcate. Include, unless parents or guardian repay to debt,bear joint liability, the credit limit of undergraduate credit card should be restricted; Lose the undergraduate credit card of joint liability to having parents or guardian, blame classics its are written agree, must not increase line of credit; Prohibit to extend without the independent income, undergraduate that already had a piece of credit card credit card (the undergraduate that does not have independent income namely can have a piece of credit card only at most) . The spokesman of American banker association thinks this one act was not necessary, it is the discrimination of pair of young borrower. Senatorial Dodd mentions " credit card act " (Credit Card Act Of 2005) the requirement is 21 years old of the following person application credit card are due couplet arrange support of the people indicates independent income source, or offer a few prooves. The anti of this one act puts forward the person of above 18 years old to have the freedom that signs a contract independently by legal provision. Senatorial Menendez mentions " young customer protects proposed law " (Protection Of Young Consumers Act Of 2006) also to 21 years old of the following people to hairpin orgnaization sale credit card makes limitation. But these act had be notted obtain through.
According to American Cards International (2004) , a few cities of American have legislation to prohibit certain the action of credit card sale to the undergraduate, if new York city prohibits the credit card sale inside campus; Arkansas prohibits inside campus face-to-face sale; California requirement university undertakes administrative to the card sale inside campus, make clear " legislative intent " it is the way that should prohibit be calorie of application and offers a gift; Hawaiian city asked the university undertakes administrative to the card sale inside campus 2003, requirement university " consideration " the way that prohibit be calorie of application and offers a gift; Kentucky asked undergraduate application credit card is due 2004 written accredit of parents; Return the credit card sale inside some state requirement campus must with the booklet that undertakes debt problem is taught, etc.
The investigation 2004. American student loan extends the undergraduate that orgnaization Nellie Mae borrows money to applying for its (note: This need to notice, not be random and draw-out, the probability is higher than actual and average level) the analysis that undertook credit card uses a case. The process that the undergraduate use to credit card drops after experiencing to rise first in recent years. See next tables.
Nellie Mae reckons market of undergraduate credit card approachs saturated point basically, scale of the person that hold card may drift in 80% fluctuation; About the fall of data report is opposite socially the attention of problem of undergraduate credit card and education of the person that hold card get certain result. The use of credit card is more general as the heighten of grade, 2004, big the new student of one has 42% to have credit card only, big the graduate of 4 has 91% to have credit card. Of 56% big 4 students have credit card of 4 Zhang Huo above, only the new student of 15% has so much piece. Big 4 students are average not countervail remaining sum is 2864 dollars, the new student is 1585 dollars. The investigation of Nellie Mae shows, will look from the remaining sum of application credit card, straight mail still is the mainest way that undergraduates win credit card, it is parental commendation next, just be campus is sold continuously again. Of 21% suffer investigation undergraduate to say they pay off debt every months, 44% say reimbursement exceeds lowermost reimbursement specified amount every months, but it is certain to have not countervail remaining sum. There is 5% to do not have any working only in sufferring the person that visit, rely on a family completely, the student of 30.5% even a week works 20 hours above, they also are to overdraw on average the crowd with highest forehead, let a person must fear these students are owed to pay off whether overwork down to can affect school work.
But credit card not the fall of countervail remaining sum, the likelihood still has a covering factor, the students that are faint countervail debt are encouraged to borrow student loan to repay by hairpin orgnaization credit card debt, student loan specified amount achieves the history new tall (Scurlock, 2006) . The undergraduate applies for to go bankrupt the amount still is in grow in quantity (Northway, 2007) .
A more extensive than Nellie Mae sampling limits questionnaire investigation shows the TERI/IHEP when 2000, the student of 64% has a piece of credit card at least, those who compare Nellie Mae 78% a few lower.
Another investigation shows, 18-24 year old the American between 2001 credit card of average per capita not countervail remaining sum 2985 dollars (the undergraduate average per capita of prep above Nellie Mae 2327 dollars, because,estimation is this age paragraph student of person if not, due and independent income but income is inferior, not countervail remaining sum is taller) , grew 104% than 1992. 2002, average per capita of student of university high grade has 6 pieces of credit card, average per capita not countervail remaining sum 3200 dollars (Wille, 2006) .
The cost of all sorts of credit means that Nellie Mae thinks to should let undergraduate understanding include credit card inside through education and responsibility, let an undergraduate bear the blame the ground uses credit card.
The ABC of individual finance affairs that Jump$tart Coalition does to student of high school high grade (include credit to use) a test makes clear, breaking the administrative division with high yield, students are 55.6 minutes on average, capturing the province with low yield, students have 70.3 minutes on average. This report has credit and knowledge of conduct financial transactions to be immersed in to precaution debt and go bankrupt the problem may have certain effect. But, also evidence makes clear, the action that credit teachs is finite, especially if be course of 9 days of short-term merely, can not have very big effect.
Scholastic viewpoint. The scholar thinks to should restrict pair of minor (in the United States, credit card sale already began to be aimed at a high school student even, the high school student considers as hold credit card a kind of position to symbolize, think oneself " was brought up " ) with the undergraduate (the standard of adult of American each city is 18 to 21 years old, most undergraduate already was adult, but differ again with the adult that has independent income) credit card sale (note: Be not is to prohibit hairpin) . But a lot of people think this cannot have effect, the credit card sale that is full of socially always can affect an undergraduate, hairpin orgnaization always can have regulation of method steer clear of.
Mann (2005) the problem that thinks product of hairpin orgnaization design, sale and the contract provision that draft exist to exploit weakness of acknowledge of typical customer psychology intentionally (be like with introducing inferiorly period interest rate and do not have year of cost to attract customer, let them carelessly regular interest rate and clause of break a contact) , the minor that lacks judgement is easier by misdirect (be similar to let minor smoke) , early sink overdraws consumption, indebted behavior mode.
Jekot (2006) think, be in the United States, although credit card to the undergraduate, also resemble to someone else same, have a lot of use, trade from the net, order airline ticket to arrive other trade. But, also not be indispensible. The student still can use ready money or borrow write down card pay; Of credit build also not be eager to taking the place of when the university, after the income that can working to have stability. Bank from the gain on market of undergraduate credit card, but this is be cost with fixed social cost (going bankrupt is the most apparent consequence that has negative exterior sex) . The person age that if Bermant and Flynn are right,American application went bankrupt 2000 paragraph take compared analysis, highest is 40-44 year old, occupy 16.3% ; It is 25-29 next year old, occupy 15.2% ; Undergraduate age paragraph occupy 5.4% (undergraduate age paragraph go bankrupt with respect to application, too terrible also) . According to speculation, 25-29 age paragraph go bankrupt probability is high, the debt that also accumulates possibly with university phase is concerned.
Jekot points out, in credit education, only and financial knowledge (let a student know to be able to return lowermost reimbursement specified amount to be able to not have sufficient liquidity on behalf of you for example, return lowermost reimbursement specified amount to need how to long just can pay off debt only) education is insufficient, the basic conduct financial transactions that more important is profundity is watched / the education of viewpoint of value, want to make a student clear, sacrifice of short-term of the need in campus will obtain more long-term welfare (read now cannot earn money, corresponding consumption also accepts an obligation, this is to have higher income later) , some desires can adjourn only contented (if consume, is not requisite, should when enjoy again after the job, and cannot place a hope at the job later again repay a debt) . Had this one concept, a variety of temptation that just can resist hairpin orgnaization give, the sale measure that gets them less to try to change consumer behavior to be used to (all sorts of wonderful advertisement, gift, discount, increase line of credit) influence.
Manning is in " credit card country " in the analysis that made profundity to the problem of undergraduate use credit card. The United States' extremely general already student credit card affected consumptive pattern of the student deeply, modelled young generation to be opposite the idea of credit and debt. The use of credit card has its necessity, the inadequacy that the student of the campus charge of rapid growth and low cost borrows money makes a lot of students must rely on credit card to regard a financing as the method, after working ability pay off. Additionally credit card also is a method that makes up for breach of provisionality income and expenses, if parental living cost was not sent on time because of a variety of reasons, summer vacation works the Qian Zaixue that earn period end gave out, be forced to overdraw, work in winter vacation earn money to still go up again, the debt change of credit card of this kind of student is dynamic, concern with a lot of element such as cycle of the student's grade, school year, holiday. But, undergraduate credit card makes the student gains financial freedom too easily, ability and interact are abstained to vie in lack below, financial freedom often evolves for financial chains. The undergraduate just leaves authoritative canal of parents to accuse, hope him establish independent status, and the false appearance that credit card gives an undergraduate to become independent in order to obtain finance affairs. University him survival of a few credit card that have parents to give application files credit card, with the monitoring of escape parents. The student had credit card to increase a student to do business of unallowed of a few parents (include travel, Tan Lian love, buy high-grade dress to wait a moment) economic origin, aggravate the conflict between they and parents.
The scholar that ever had held the position of president of Indian Central Bank pulls Zhan Zaiji " fault line " write in one book " credit serves as the key that leads to an opportunity and the method that lead to your due consumption, the debt that perhaps serves as injustice and the won't have forever future that you mortgage -- these two opposite point of views are perforative the history at the United States. Former often period of popular Yu Fanrong, latter turns into in slump period the mainstream. We are the creation energy that should want to enjoy finance, be still so that should most person is close to,we think finance is too dangerous and should we rise its limitation? " pull Zhan Ren to be, "Below the condition that the manner be decided by that the society reforms to finance offers corresponding means at whether believing to be in, the individual can make rational financial decision with company substantially. " " the integral trend of civilized and democratic society is ceaseless for the influence that everybody dilate chooses is not limitative choice, prep let alone undertakes limitative to specific crowd merely. " but youngster, especially student, return lack to abstain force and reimbursement ability, need makes certain limitation and protection. 2009, the United States was passed " credit card opposes bill of right blocking a person " , the youth that bill provision does not get Xiang Weiman 18 years old extends credit card, right full already 18 years old but not full full-time undergraduate of 21 years old extends credit card added relevant provision and limitation. (The article turns from public date " Yu Jianqiong cropland " , already obtained author authorization)
