Is the World Ending Tomorrow?
The number of articles written about tomorrow’s change in credit card rules seems to be approaching Y2K Armageddon levels. Pity is descending upon the young and creditless, particularly college students eager to light up credit card terminals with their new-found addiction. Mr. ToughMoneyLove’s heart is breaking. This denial of the fundamental civil right of credit cards to our young must end!
“It’s my safety line,” said Zachary Allen, 19, a business administration sophomore at Saint Leo University in Saint Leo, Fla. “I use my credit card for everything, from gas to my books to food and clothes.”
Allen has a good summer job working on the back of a garbage truck in Long Island, N.Y., that earns him $15,000 a year. But he can’t convince his bank to raise his credit limit above $700, and he’s been denied for other new cards.
“We’re at record high unemployment for our age group and the government is spending billions of dollars a month, but they’re not helping students,” Allen said. “Why isn’t Congress helping us instead putting more constraints and pressure on us?”
I commend the guy for having a good summer job. But when he says that his credit cards are his “safety line” it gives him away. There is nothing “safe” about using a credit card to make ends meet. That’s a mindset that too many Americans – young and old – have adopted. If there is not enough income, Plan A is to fill the gap with credit. With multiple credit cards (which poor Zach Allen desires), filling the spending/income gap with credit becomes Plans A through D – or more.
Also note the other dangerous attitude the young Zach Allen expressed: Why isn’t the government helping students more?
Does he mean more than making it easy for students to use thousands in student loan debt to attend college? (Note that I did not say “graduate” from college. Don’t get me started on the way that colleges churn students for tuition money then spit them out with nothing to show for it except debt.)
Zach Allen is whining about a problem that he created. He’s already made one terrible financial decision – going to St. Leo University in Florida. Have you heard of it? Probably not. According to its website, it cost about $31,000 annually to attend. Zach Allen is from Long Island. Do you think he could have found a public college closer to home where his $15,000 summer job would have paid most if not all of the cost? Most likely. There’s your “safety line.” Instead, he complains about not having enough access to credit. Typical. Being a “business administration” major doesn’t teach you much about personal finance.
The world is not ending tomorrow folks. Each of the money writers in the media should have written a three word article about the imposition of tougher credit card standards: It’s about time.