Living Below Your Means
Power of Plastic (from 60 Minutes II)

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By spl241
July 13, 2001

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CBS's 60 Minutes II last night led off with a piece called "The Power of Plastic." Its focus was introducing credit cards to college students. CBS had been promo-ing this for 2-3 days, so I was note-ready in case they had any new or startling perspectives on the subject. I soon found myself unable to handle Orville Redenbacher and my notes at the same time. Let me hastily add that Orville's corn was much more palatable than what I learned.

Like you, perhaps, I was already aware of the intensity of credit card hawking on campuses. When I took my daughter to school a few years ago, the glitzy and alluring booths were hard at work on move-in day, offering everything from phone cards to T-shirts to Texas Roadhouse dinners. Our taillights were probably still visible as my daughter began her quest for adult "independence" by signing on two dotted lines. I've posted in the past about the fallout from this. One "freshman-just-seeking-independence" bailout was followed by the toughest of Tough Love tactics.

Innyhoo, last night's show was startling in several respects. I did not know that colleges make very serious money themselves from the CC-hawking process. For example, the U. of OK gets a minimum of $13 million from First USA for vending rights. Additionally, U. of OK gets a .4% rebate on all purchases made with cards obtained on campus. First USA -- and they're not alone -- has similar agreements with other colleges.

My reaction to this is blunt and simple: Institutions of higher learning appear, in this case, to be undermining the reason for their very existence. They exist, in theory, to provide more tools for young people to make a good living; in practice, however, they are aiding and abetting companies who all too inevitably and insidiously lead many young people to financial disaster. In 1999, 100,000 people under the age of 25 filed for bankruptcy. I've been to football games at Michigan Stadium, which seats slightly more than 100,000, so I know what 100,000 people in one place looks like... just the hypothetical idea of every seat occupied by a bankrupt person in America under 25 staggers me.

The show contained interviews with parents of two kids who had taken their own lives. One was 22 and a National Merit Scholar. He had 12 CCs and was $14K in debt when he hanged himself. I interpreted this as an example of trying to reverse a possible stereotype that only young "dummies" get involved with CC overextension. Near the show's end came a dose of revulsion in the form of Black Irony: CC offers were still arriving at the homes of the two college students who had killed themselves due to what they saw as inescapable debt.

It took some "pressing" on the part of the 60 Minutes II correspondent to get a CC rep to admit two things: 1) That credit is freely extended to kids who have no independent income such as a part-time job, and (hard pressing here...) 2) That there is the expectation -- backed by research -- that parents will step up consistently and pay off the plastic.

Will Sheila flunk that first English 103 essay? Will Rob sleep through that 7:30 physical science lab where rock samples will be identified? Those are typical worries that parents have about their college freshmen. But as 60 Minutes II amply demonstrated last evening, there's perhaps a greater need to worry about the seemingly coherent arguments of the CC-hawkers who are a hell of a lot more interested in seeing to it that rocks get in kids' heads rather than on lab tables.