Michael Caputo, one of the icons of Minnesota Public Radio’s Public Insight Journalism initiative, and I have been talking in the past week or so about how people are paying — or not paying — their bills.
On Wednesday, during the News Cut on Campus listening tour stop in Moorhead, I was set up not far from a group from a bank who were trying to sign students up for credit cards.
Coincidentally, Michael sent me this today on the subject of students trying to balance their credit card debt:
As if paying for college was not rough enough… now that plastic in your pocket is getting into the act.
Philip Novak of Minneapolis thought it made sense to put about $8,000 on his credit card. The rate was good and he needed to buy books and supplies, like a laptop, while pursuing his engineering degree at the University of Minnesota.
Then he heard that Citicard’s rate was being doubled to 14 percent. For a returning student, not relying on support of parents, this is a factor that is helping to make his fifth year of school quite costly.
“I’ve tried to find other cards onto which I can transfer balances, but because I’m a student with a low income, I’m having trouble qualifying for $8,000 in credit,” Novak said.
He’s one of many college students getting caught up in the recent rate hikes by credit card companies.
You may remember that university’s were encouraging students to use credit cards for tuition and books costs.
A Minnesota State Colleges and Universities survey in 2005 on student financing said 25 percent of students use credit cards to pay part of tuition or fees… 37 percent use them for books and supplies. That’s only going up, said the MnSCU Student Association advocate Shannah Moore.
The reason: Rising tuition, the cap on federal student loans and the tightening of the private credit market.
In many ways, we saw this coming. In this 2004 story, MPR’s Elizabeth Stawicki called attention to the increasing role of credit cards in funding college.
If you’re caught up in the credit card interest rate-raising, we’d love to hear from you. Please comment below.