A comment to a previous post about college students and credit card debt inspired today's post. "Student" writes:
Credit card companies typically employ a very sly tactic in getting college students to register new credit cards. They usually give a very low interest rate for the first year. After the first year, the interest rate will begin to increase. Fortunately, since college students are still very young, their credit cards' limits are a lot lower than their adult counterparts who are in the corporate world.You're absolutely right, and I'd add that credit card companies use many shady tactics to get students to sign up. In a previous post I wrote about how one of my college hustles was working a table giving away 'free' t-shirts to get students to sign up for credit cards. I got paid in cash and my classmates got shirts they never wore and a mountain of debt.
One thing I will challenge is your statement that students' credit limits are necessarily lower than working folks. It is true that students have lower incomes and should have been given very low credit limits but lending standards were so lax for so long that many students left school with just as much credit card debt as working professionals. College seniors with at least one card last year graduated with an average of more than $4,000 in credit card debt.