College Credit

Shopping spree for your first apartment: $2,500
Spring break in Cabo: $1,000
Avoiding college credit card debt: priceless

It felt good to spend money.

Jennifer Fuller handed over her plastic card, watched the clerk slip it through the reader and listened to the chug-a-chug of the machine giving her its approval: The card was good, Jennifer Fuller was good, and spending money was very good.

She was 19, and like many young people furnishing a first apartment, she was at IKEA. She had picked out end tables, a coffee table, display cabinets and candles, even pictures for the walls. Most of the items cost less than $100, but the sheer volume drove the total to more than $2,000.

Jennifer Fuller had to drop out of school so she could work to pay off her debt. She regularly puts in  70 hours a week waiting tables.
Daniel Kramer
Jennifer Fuller had to drop out of school so she could work to pay off her debt. She regularly puts in 70 hours a week waiting tables.
Former UH professor Robert Manning says credit card companies use  predatory business practices to lure in college kids.
Courtesy of Robert Manning
Former UH professor Robert Manning says credit card companies use predatory business practices to lure in college kids.

That very day IKEA had invited Fuller to apply for a store credit card. IKEA didn't care that she already had credit cards at Macy's and Dillard's and Best Buy and Circuit City and Foley's and Abercrombie & Fitch and a few other places too -- or that the balances on those cards were already hovering near their limits.

And IKEA didn't care that Fuller was a struggling student at College of the Mainland, waiting tables at a Kemah restaurant to pay tuition. It only cared that some bank had issued her a Visa at a special student rate -- that was all the proof the store needed that Fuller was creditworthy. After a quick application process, the clerk handed her a card with a $2,600 limit and a whopping interest rate of 23.75 percent.

She maxed out the card in three hours.

"There's the instant gratification you get when you get something, it's great," says the 24-year-old petite, dark-haired woman, looking back on her fateful IKEA shopping spree. "But all of that stuff wouldn't even fit into my apartment when I got home."

Not long after the IKEA trip Fuller realized her $2,600 binge would end up costing her much more than what she'd charged -- and the price wouldn't come solely at the expense of her bank account. Soon, she would find herself gasping for air in sea of credit card debt that totaled around $20,000.

"Now that I'm an adult," she says, "I feel like a child because I've been so stupid."

But Fuller is far from the only college-aged kid who feels like a chump. One 2001 study by Nellie Mae, a major lender of higher-education loans, discovered that 83 percent of undergraduates have at least one credit card -- a 24 percent increase from 1998. The median balance on that card has risen to $1,770, up from $1,236 in 2000. Almost a quarter of the kids with cards carry balances between $3,000 and $7,000. Perhaps the most damning statistic is that, according to Nellie Mae, students double their average credit card debt and triple the number of cards they carry from the time they show up on campus to the time they graduate.

Just where these college kids are getting their cards is a source of controversy. In addition to special student deals like the one offered to Fuller, colleges and universities have been developing exclusive agreements with credit card issuers since the early '90s. These "affinity cards" sport the schools' logos and give a tiny percentage of each transaction to the universities or their alumni associations. These percentages can total in the hundreds of thousands of dollars a year. In exchange, the schools often allow the cards to be marketed to students at the student union, through the mail and even at football games.

"Colleges allow these companies to go hunting in a baited field," argues Robert Manning, a former University of Houston professor and author of Credit Card Nation, a manifesto that blasts schools for agreeing to such partnerships. "We're giving kids credit before they get their first job."

But what students are rarely getting -- at least according to those who want to stop the ease with which kids can get cards -- is any kind of financial education that would allow them to make wise spending choices.

Even Fuller is quick to say that students must hold most of the blame for their debt. If they're legal adults, then it is their own irresponsibility, their own hunger for quick gratification, that gets them into trouble. What Fuller's angry about is that no one ever taught her the rules of the game.

"Without knowing, I made the wrong decisions," she says.

Fuller has almost nothing to show for her massive debt -- only a television, clothes and IKEA furniture, some of which has since broken. The bitterest reminders are the six balances she still has to pay off.

"Express, Visa, two MasterCards, IKEA, Best Buy," she counts, ticking them off on her fingers. "Damn IKEA," she says with a sigh. "It's still at $2,500."


It started with a telemarketer's call during dinner at home with her mom. A dean's list student who wanted to go into public relations, Jennifer Fuller considered herself a bright girl. When the person on the other end of the line offered her a Visa at a special student rate and urged her to take this chance to build her credit, Fuller spent the ten minutes it took to apply and soon received her card in the mail. Its limit was $300, but over the years it was upped to $2,500.

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