Majoring in Plastic

With Easy Access to Credit Cards, Students Pick Up the Debt Habit Early

Lavina Ramchandani, 20, got an American Express card two months ago so she could pay this semester's tuition at the University of Maryland.

Holly Jackson, 19, got a credit card when she needed a laptop.

Ethan Elser, 20, recently used his card to pay for a spring-break trip to Mexico.

All are college students, and all are in debt.

As the economy worsens, largely because so many people took out mortgages they could not afford, the nation is questioning how credit could have been made so easily available and why consumers were so eager to accept it.

But experts say it is behavior that begins at an early age. Decades ago, it wasn't until one had a career, a spouse, even a child that credit cards typically entered the picture. Now, once people turn 18, they are bombarded with credit card offers. College campuses have become breeding grounds for new consumers of credit, with companies using free T-shirts, sandwiches, even iPods to entice potential customers.

"Most adults already have too many credit cards," said Ed Mierzwinski, program director for U.S. PIRG, a federation of state Public Interest Research Groups that defends consumers. "It's expensive to market to people who have credit cards with other companies. College students are an attractive market."

Consumer advocates say college students can least afford to graduate with debt these days, with an unstable job market. Many of them will graduate not only with credit card debt but also with student loan debt.

"Going into a recession, which it looks like we are, are you going to spend all this money on school and then graduate and not be able to find a job?" said Emily Davidson, a financial expert at Credit.com, a Web site that rates credit cards.

In a recently released U.S. PIRG survey of 1,500 students at 40 colleges in 14 states, nearly two in three students reported that they had at least one credit card. Fifty-five percent of cardholding students said they used their card for day-to-day expenses. Reflecting escalating college costs, 55 percent said they charge their books and nearly one-quarter said they pay their tuition with a card. On average, those freshmen whose parents were not helping them with their bills had a balance of $1,301. Seniors had more than twice that, $2,623.

Nellie Mae, a student loan company, gathered similar data when it did a study of undergraduate credit card use in 2004. Seventy-six percent of undergraduates began that school year with credit cards, and the average balance was $2,169, lower than it had been in 2001.

Jackson, a sophomore government and politics major at the University of Maryland, has more than $2,000 in credit card debt. She has two cards, one that she opened to buy a Dell laptop and another that she used to pay for gasoline, food and books.