Credit cards — love them or hate them, they are undeniably essential to the everyday lives of American college students. Or are they?
I believe that credit cards have stifled the American Dream for college students across the nation. The deceptive marketing tactics and cultural push to accept credit cards has been one of the great mistakes of this nation.
Credit cards have been around since the early 1900s, when department stores created cards that could be used to defer payment on goods bought at their stores, making them more similar to today’s store cards. These cards were used by mainly wealthy individuals who wished to make purchases without carrying large amounts of cash on them.
However, the first card that fits our modern day idea of a credit card came out in 1966 as the BankAmericard. As the popularity of credit cards increased, so did the regulatory measures enacted by the federal government, such as the Truth in Lending Act that standardized a uniform code of disclosure and terms so that consumers would be aware of the full cost of credit cards.
The writing was on the wall for the commercialization of credit cards in the 1980s when Discover began the first rewards credit card where consumers could gain rewards for buying items with their cards. In 1980, the average credit card debt was $500 per household, but in 1990 it rapidly jumped to $3,000. This alarming rate continued to increase especially as credit card companies began focusing their rewards on airline travel.
In the modern age, we have now seen the effects of this marketing. Average household credit card debt has increased to $19,865, a staggering figure which should alarm even the most ardent advocate of credit cards.
What does this mean for college students? At an individual level, the 65% of college students who have credit cards are in ever-increasing credit card debt, with the average being $3,280 in 2024. Additionally, credit card debt in college is 6% more common than student loan debt, while the top two spending categories for college students were online shopping at 70.1% and dining at 50%.
This is a startling realization, as college students are adults who are entering into independence but are putting their finances in jeopardy. As Americans, we should want our students’ finances to be healthy; not only because it will help the economy, but also because financial stress has been found to be a source of stress, anxiety and fear.
In early February, Dave Ramsey, a financial expert who has helped people get out of debt since 1992, was eager to give a quote directly to college students at The University of Alabama about the issue.
“Credit card debt is a trap, and students are one of the biggest targets. The best way to win with money is to avoid debt altogether. Credit card marketers are excellent at their jobs,” Ramsey said. “Especially on college campuses. They are notorious for targeting students and telling them a credit card is a right of passage into adulthood. But it’s not. When you sign up for a credit card, you are signing your life away to these banks. They own you, and you gave them the deed.”
Ramsey said he had a student call into “The Ramsey Show” who had signed up for multiple credit cards just to get free merchandise. What started as an “emergencies only” credit card became one used weekly, and suddenly the student was $15,000 in credit card debt. What started as a financial venture ended in this student quitting college to work to pay off his debt. Ramsey urged students to use debit cards and gain freedom from the banks that sit back watch this happen to students.
Ramsey is absolutely right. College students deserve better than to be trapped in credit card debt. If credit card companies try to convince you that a bundle of credit cards is necessary to your well being as an adult, I urge you to thank them for their time and walk out the door.
College should be a time for growing, learning and building a future, not digging a hole of debt that takes years to climb out of. It is past time that people speak up about the dangers of excessive debt and stop normalizing it as “the American Way.” Instead, this next generation of college graduates should normalize financial success through hard work, perseverance and faith. After all, what is more American than this?
