Legislation to keep kids away from credit fails in Tennessee
April 18, 2008
NASHVILLE, Tenn. — The proposal failed 3-3 along party lines in the Republican-controlled Senate Education Committee on Wednesday.
Opponents of the bill say students aren’t targeted. But if a card is obtained, they say credit limits are in place to help students avoid debt.
This bill is not drastic, it does not say college kids cannot have credit cards. The proposal was to give students an opportunity to opt out of receiving offers. I think that it’s sad that students cannot choose to opt out of solicitations. They’re not denying the students actual credit cards, just giving them the option to not have it in front of them all the time.
“We think we run a responsible program,” said Hank Dye, spokesman for the University of Tennessee, one of the bill’s main opponents. “We start out with a modest credit limit … of about $300. There are safeguards in place.”
The credit limits only cover what you can spend. A card can easily go over the limit in late fees, overlimit fees, and interest fees. Once you max out one of these $300 cards the interest can put you overlimit, you don’t have a job so you’re going to incur a late fee, and then next month the same thing will happen. One $300 limit credit card can easily go over $1000 in a matter of months from just a little reckless spending up front.
The article goes on to say that of the 2,100 University of Tennesee students only 1.2 percent defaulted on the card last year. What about the rest of them? Did they ask how many had to ask their parents for help? How much in total late fees and overlimit fees were charged to these kids that don’t even have a grasp of bills or money yet?
Of course not. Having statistics like that would not look good for the credit card issuers. It’s a shame to give college-age children the power to make decisions that can really start them on a downward spiral of credit problems that can be lifelong.
Full story available from the Houston Chronicle…
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[…] Legislation to keep kids away from credit fails in Tennessee This bill is not drastic, it does not say college kids cannot have credit cards. The proposal was to give students an opportunity to opt out of receiving offers. I think that it’s sad that students cannot choose to opt out of … […]