Since college students are fast becoming one of America's largest consumer groups, banks are now beginning to see them as their new market
for credit cards.
Credit card agents have begun to flock different colleges and universities offering students credit card applications. In order to entice their
potential clients, credit card companies give away freebies, ranging from T-shirts to iPods, just for the students to sign up.
Today's College students belong to
the so-called Generation Y (16-35 years old), and this age bracket is expected to grow up to 26.3% by 2015, making it the second largest consumer group in the
United States. College students are also the ones more exposed to the benefits of computer and digital technology; likewise, they are expected to spend more on
gadgets ranging from laptops, mobile phones, and game and entertainment consoles.
Credit card companies, meanwhile, see this as an opportunity for them
to reach the college student market. Not only do credit cards offer students an avenue to buy these things, they also offer convenience. Since students rely mostly
on allowance, credit cards can shoulder their immediate needs such as food and gas. Nearly 70% of American college students use credit cards today, which they
use to provide for their daily necessities.
Indeed credit cards come to be very handy, but the question is, do they really help college students with their
finances? Not quite, actually. Their parents usually pay for the credit card bills while their children are still in school. Meanwhile, other students finish college with
outstanding debts because of credit cards. According to the Nellie Mae data report, the average undergraduate owed up to $2200 on credit cards in 2004, while the
average graduate owed up to $8700 in 2006.
Rising credit card use among college students is brought about by insufficient funds for living allowance. As
consumers they are given no choice but to face frequent price increases and a growing variety of expenses. Thus, scholarships take on an important role to help
college students. Wide selections of scholarship grants have been made available to aid students meet their financial needs. Scholarships can cover major expenses
such as tuition and room and board for as long as their recipients meet their eligibility requirements. And unlike credit cards, scholarships help students graduate with
pride-and not leave them in debt.
Sources:
http://www.usatoday.com/money/perfi/college/2008-03-30-credit-cards-college_N.htm?loc=interstitialskip
http://www.msnbc.msn.com/id/20607411
http://www.crmtrends.com/ConsumerDemographics.htm
