Apply for a Credit Card and Get a T-shirt: What Could Go Wrong?

Read the fine print

Credit card solicitors are no longer allowed within a thousand feet of a college campus if they are giving away freebies in exchange for signups. But in my day, campus was crawling with them. And they got me.

One day during my junior year, I was walking to English class with a girl named Stephanie who was in the same class. We passed the credit card table, and she said, “Stephen, look! Free stuff if we sign up for credit cards. T-shirts, keychain flashlights, and calculators.”

“Nah,” I replied, “I don’t want a credit card.”

“But you don’t need to actually get one,” she insisted, “you just put down really pathetic information about your income and you won’t be approved. And you get to keep the free stuff. My brother does it all the time.”

I did not want the t-shirt, flashlight keychain, calculator, or credit card. But it was a beautiful day, there was time to kill, and I wanted a reason to spend more time with Stephanie. Reflecting that my income (from Fazoli’s) really was pathetic, I knew I was bound to be rejected by the doubtlessly discriminating credit card company. So I signed.

Deja considers - and rejects - a credit card. She works at a non-profit that helps students get a college education while minimizing debt.

I tried to cut corners. I left spaces blank. I fibbed, and wrote that my annual income was $1,000 via “allowance,” which was a box you could check. The 50-something-year-old credit card table man hovered over me, making sure that I filled out every required line.

Almost nothing about this experience felt good. I wasted the nice day, we were late for class, and instead of talking with the girl I spent my time wrangling with the grizzled credit card man as he hounded me about my identifying information.

I wasn’t approved for a credit card. 

I was approved for six credit cards.

I hadn’t noticed that the single application I filled out was a convenient stand-in for six applications. (It could have been more for all I know. Maybe it was more and some company actually did reject me and my fake $1,000 allowance.) This fact was hidden both by the obscurantist language of the signup forms and Credit Card Table Man himself, who had somehow replaced Stephanie as my guide and companion for that afternoon. Worse, the fine print automatically bought things for me. The signup included a couple magazine subscriptions which were charged to the cards. 

As for the free stuff, the T-shirt wasn’t my style and wasn’t my size anyway. The keychain flashlight quickly ran out of batteries. At least the calculator was a success. I had it for years, and used it until it was replaced by a cell phone.

I got smart. I cut up the cards and canceled the magazine subscriptions.

Getting a credit card can be an exhilarating and shocking sensation for young people. For the first time in their lives, they don't have to actually have money to buy things. It feels like power and freedom. Surveys show that between 25% and 67% of college students have credit card debt (stats vary widely; always search for more than one source!). Carry-over balances hover around $4,000 on average. The most common reason I hear for having a card is “for emergencies.”

Counterpoint: if you have money saved for emergencies, there's no need to use a credit card for that.

Is this too harsh? “Not everyone has enough money, Stephen.” Yes, I know. But then they also don’t have enough money to pay the card back. I also know that plus-or-minus 50% of college students (or whatever the number with a balance) haven’t had emergencies so unplannable-for that they need to sling the card around. It’s not just college students. Most adults tend to spend pretty close to what we earn, regardless of what we earn. And then we act shocked when something pops up. Friends, I promise you: the car will break, you’ll need another car at some point, someone will get sick, you’ll want to go on vacation, and Christmas comes at the exact same time every year. We tend to live just a little bit above our means. How can we learn (and teach) young people to build up a fund to pay for these things, so we earn interest, rather than paying it?

For adults, it starts with better budgeting. We need to budget for the whole year, and plan big expenses, like birthdays and holidays. We need to save throughout the year for those things.

For kids, get them a bank account when they start earning money. All money should go straight into the bank. When they need money to buy something, they can withdraw it. This isn’t budgeting, but it is setting the habit and expectation that money doesn’t need to be spent immediately. It’s to be saved for something you really want. Most banks and credit unions have accounts for kids. You can get started right away.

The college students I teach are pretty wary about debt, especially student loans. Most have a plan to keep debt to a minimum. One example of such a planner is the young woman in the picture, named Deja. She told me “no, I refuse to get a credit card because then I’d be in even more debt!” She has $15,000 in student loans, but she has a lot of grants and scholarships, has a job, is living at home, and says she has a plan to pay off her loans rapidly after college. And she’s even a counselor for Partnership for the Future, helping low-income students get a college education while taking on little debt.

“If I knew about this program, I wouldn’t have had any debt,” she told me, “I want to get out of this debt as soon as I can.” 

It’s tough for young people to get their financial lives started. But if you’re walking around a college campus nowadays, it’s comforting to know that you’re more likely to find someone like Deja to give you advice, and not Credit Card Table Man.