Helping students to avoid credit ‘gimmicks’ & card debt
Advisers, according to the National Consumer Council, should be warning new university students to be on their guard against tempting offers of free cameras, book and music vouchers and other gimmicks from credit card lenders. Building up credit card debt is, they say, a high price to pay for such cheap gimmicks
The National Consumer Council (NCC) say that credit card debt could push students ‘over the edge’, as thousands of young people prepare to start their university courses. Debts of £11,000 and more are an increasing reality for many students, and there are worries that an increasing number are using credit cards to top up their student loans.
The NCC and the National Union of Students (NUS) want us to help students see beyond the gimmicks and make sure they understand the often high charges linked with credit cards.
“Many undergraduates are easy prey for credit card companies,” warns NCC Chief Executive Ed Mayo. “They are financial novices plunged into a new and exciting independent phase in their lives – with very little to live on. The first lesson for students is that credit cards are not the answer. Their free gifts are nothing but seductive offers to be ignored.”
Engineering student Natalie, currently in her fourth year at Cardiff University, fell into the credit card trap. “My student loans were not enough to keep me going,” she says, “so I took out a credit card. The offer of £50 worth of book vouchers seemed very appealing too – especially as I knew I would have to spend a fortune on textbooks. But I never got the vouchers. I did complain to the company, but nothing was ever done.
“I have had to juggle my studies around – I even had to miss lectures - just so I could go to work to pay off debts. After working all summer, I am now finally in the clear. I imagine it will be the same again this year, although I am now worried about fitting in work and studies in my final year. My advice to any student thinking about a credit card is don’t go there unless you really have to.”
Her words are echoed by 20 year-old Tim, a second year student reading Computer Science at Aston University: “When I arrived at my Freshers’ Fair last year, we were all pressed by Barclaycard into applying for credit cards with the offer of free cameras or popcorn makers. The funny thing was, I was not interested but at the same time felt tempted. I got the popcorn maker but, lucky for me, I decided that the card was too risky so I cut it up! I would advise other students to do the same too.”
Read the small print
Finally, we should pass on the message from NUS President Mandy Telford: “Don’t be sucked in by free promotional offers when you open a credit card account. Make sure you read the small print and fully understand the charges that come with credit cards.”
To find out more, visit the National Consumer Council website at: www.ncc.org.uk