"Free pizza, free T-shirts, free beer… all you have to do is fill out this form." If you haven't encountered this "deal" yet, you surely will sometime before the end of the semester.
Credit card companies habitually set up promotions at UF, hoping to prey on students with little self-restraint - or those who just want some free stuff. While sometimes these may seem like great offers, the truth is they are just scams.
A couple of years ago, I indulged in curiosity and filled out one of these applications. In addition to quizzing me about my personal information and Social Security number, it asked for my annual household income. As an unemployed college student, I answered that I had none and figured that my application would be denied. But hey, at least I got a free "college" T-shirt.
To my surprise, I received a letter informing me that I was approved but only for an ,1,800 credit limit since I had no credit history. In an effort to overcome this obstacle and make a few more bucks, the company enclosed two cards (a Visa and a MasterCard) with the letter, so that I could rack up ,3,600 in debt with no way of paying it off. And with a 22 percent annual interest rate, I don't think they were in any hurry for me to do so.
Credit card companies that target college campuses aren't stupid; they know that most students lack the financial experience needed to understand the implications of accruing high-interest debt. They hope students will max out these cards, so they can start pouring on the gravy, which is much easier than you think with the astronomical rates that accompany the "guaranteed approval" slogans.
Despite my position against these scams, I want to affirm that I am not against credit cards. I think a credit card is a good thing to have, especially in case of an emergency. Furthermore, building credit will help down the road as you consider things like a home mortgage. Just remember that you need to pay your entire bill each month; do not hurt yourself by getting into the habit of making the minimum payment.
For first-time users, MONEY magazine recommends finding a card that is especially for students, has a low credit limit and offers a rewards program. Some companies even add to the rewards programs for earning good grades and making timely payments. These offers are found online through major institutions like Citigroup and Discover Financial Services - not from a guy with a clipboard on University Avenue.
So when you are approached to fill out a credit card application for a free sandwich, drink coozie or whatever, just say no.
Trust me - you'll be glad you did. And if you choose to get your own credit card in college, remember to use it wisely. No one likes a sloppy spender.
Mike Patrone is a graduate student studying accounting.