While the number of credit card offers students receive may not have increased, a weak economy may be encouraging more young people to respond to the offers, according to University of Arkansas researcher Norma A. Mendoza.
"We are also seeing credit card marketers targeting younger and younger populations," said Mendoza, assistant professor of marketing and logistics in the Sam M. Walton College of Business.
explained that credit card companies are increasingly targeting high school students.
Some researchers have found that patterns of compulsive buying begin in adolescence.
"It is becoming more apparent that we must start teaching children about credit and personal finances at an earlier age.
By the time they get to the college level, they already have attitudes and habits that are difficult to change," Mendoza
"With all of the discussion about credit cards and debt, it would seem that students would be more aware of the situation," Mendoza
"But year after year the issues don't seem to change.
They seem to be living in a suspended reality, a state of denial."
recalls a day in class when a guest speaker was talking to students about credit issues.
One student confessed to having 20 credit cards, all with maximum balances.
Other students in the class joined the discussion, expressing relief that they only had 5 or 6 cards maxed out.
"It is interesting to see the students' reactions when they actually read the fine print and understand the terms that they agreed to for the first time," said Mendoza
"Not only do they not realize how the credit card system works, they don't understand how it can impact their prospects for employment when they graduate."
points out that background checks, including credit checks are increasingly common in employment situations, particularly for positions in banking, information technology or other positions where there might be a temptation or opportunity to steal money.
"Bad credit or excessive credit card debt is considered a character flaw," she
studies the debt and savings behavior patterns of college students.
has conducted numerous studies on credit card debt topics, including the impact of education about credit on college student's use of credit cards and the relationship between personality and credit card use.
In a recent study conducted with graduate student Hélène Cherrier, Mendoza found that college students that plan ahead accumulate more credit card debt than more spontaneous, live-for-the-moment students.
"Most people believe that credit card debt is caused by impulse spending or a lack of self control," Mendoza
"But our research shows that students with a strong future orientation actually depend more on credit cards than students with an orientation to the present."
The undergraduate students sampled in Mendoza's study were given a questionnaire to acquire demographic and financial information and determine their temporal orientation, the degree to which they focus on the present versus the future.
Contrary to the argument that a present orientation leads to credit card overuse, Mendoza
found that those students with a stronger future orientation tended to use more credit cards and to have higher number of credit cards with revolving balances.
also expected to find that students who relied more on credit to finance their current spending would have a high debt-to-income ratio.
This was not the case.
explained that credit card companies are luring young consumers by requiring them to pay only the minimum payment, usually 2 percent of the balance.
So even though students are carrying a large debt burden, they don't perceive it as problematic because it is not a significant portion of their income.
"Unfortunately, this approach leads students to carry debt for longer time periods and to pay more in interest rates," said Mendoza