TUE 12 OCT 2004
Credit cards carry more than benefits
By Lisa WarehamArgonaut Staff
Many college students unaware of the dangers of credit spending
Free pizza and clothing are just some of the offers that lure broke college students into applying for credit cards. New cards are popping up everywhere with tempting offers, such as getting 15 percent off a first purchase at clothing stores and earning cash or gift certificates for the money charged.
Jared Desjarlais / ARGONAUT - Credit cards from major companies tempt not only consumers, but also employees.
“Don’t put anything on that credit card that you can’t pay off this month,” Grieb said.
Credit cards can pose a hazard to students if they are uneducated in how to use the cards properly, Grieb said.
“Companies should help educate and give students a pamphlet with the card,” Grieb said. “But in the end the card is the responsibility of the person who owns it, just like any other product.”
Grieb said credit card companies are targeting college students because they are new to the market.
“People get these (credit cards) and the ones who use them responsibly keep them for a long time,” Grieb said. “It’s important for the companies to get that market early.”
Grieb said it is much harder for credit card companies to “capture” people at the age of 35 compared to 20 because older consumers probably already have a few credit cards they use regularly.
Retail stores frequently push employees to sign people up for department credit cards. Gottschalks gives employees $2 of store credit for every credit card application filled out, and a scratch card worth up to $10 if the application is approved. In August one employee from every store in the chain received a $100 Gottschalks gift certificate for obtaining the most credit card applications.
“It’s the thought they’ll sell more, and they’ll get money from the interest,” said Meagan Shoemaker, a Gottschalks associate and UI sophomore.
Grieb said retail stores have their own credit cards because credit card companies charge a fee to the store every time their cards are used. Visa and MasterCard receive 2 percent of a consumer’s purchase.
The largest revenue source for credit card companies comes from merchant purchases, not the balance interest, Grieb said.
“You swipe that card and Visa and MasterCard are getting $2 for every $100 you spend,” he said. “It’s not like the companies are trying to rip you off through interest.”
Credit cards can be good if used properly because they help gain credit needed in the future, Grieb said.
“You have to have credit to get credit,” Grieb said. “When you graduate and want to buy a real car or house, you’ll have that (credit).”
Julie Yarno, a junior clothing textiles and design major, won’t have that credit when she graduates. Yarno said her bank told her she probably won’t be approved for a credit card for three years because she was sent to collections because of a late bill.
Shoemaker said having store credit cards could help save money.
“It’s good to have the card if there are certain days where you get a certain percent off,” Shoemaker said. “And at most stores you can pay that balance off with cash right then and there and not have to worry about the bill.”
Grieb said he and his wife charge most of their purchases on credit cards so they can write one check instead of 50.
“It’s okay to have different credit cards if you realize the appropriate use,” Grieb said. “They’re for transaction purchases and not credit.”
Today
Seminar: “Reviewer’s Perspective on Proposals”Administration Building, Room 217
9 a.m.
Human resource development workshop
Administration Building, Room 217
9 a.m.
Dissertation: Toni Ruth
College of Natural Resources, Room 200
10 a.m.
Interdisciplinary colloquium: Sarah Nelson
Idaho Commons Whitewater Room
12:30 p.m.
Work and life workshop: “Prescriptions and Your Health”
SRC Classroom
1 p.m.
Discussion: “Surviving and Enjoying Your Graduate Education”
Idaho Commons Whitewater Room
5 p.m.
Lecture: “Formation of the Universe”
Idaho Commons Clearwater Room
6 p.m.
UI College Republicans meeting
Idaho Commons Crest Room
7 p.m.
Hispanic Heritage Month event
Living Learning Center White Pine Room
7 p.m.
UI volleyball vs. WSU
Memorial Gym
7 p.m.
“2003 Fall Dance Theatre”
UITV-8
8 p.m.
Faculty recital: James Reid, guitar
School of Music Recital Hall
8 p.m.
Wednesday
Human resource development workshopAdministration Building, Room 217
8 a.m.
Dissertation: Martin Hash
Buchanan Engineering Lab, Room 328
12:30 p.m.
College success series: “Test Preparation and Test Taking Strategies”
Idaho Commons, Room 327
12:30 p.m.
Foreign film series: “The Fog of War”
SUB Borah Theater
7 and 9:30 p.m.
“UI Voices”
UITV-8
7:30 p.m.
Literary reading: Novelist Margot Livesey
College of Law Courtroom
7:30 p.m.
News Editor: Jessie Bonner
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