by Joseph Kenny | 03/3/09

In an economy that has been totally destroyed by the ravages of irresponsible spending and credit practices, one eventually has to look for the source of the problem.

Among many other things, one might well realize that there's one particular place within society that has been a hotbed of activity for credit card issuers for decades; somewhere where they can take advantage of fresh, inexperienced borrowers who aren't prepared for the full responsibility of taking on an unsecured credit card and who are often tempted into signing shaky contracts through sheer ignorance. We speak, of course, of the college campus.

Jokes are often made about the "college life" of stealing ketchup packets and eating ramen noodles to make ends meet. However, these jokes stem from a truth: college is very expensive and most students cannot afford to live lavish lifestyles while attending. Imagine the mentality of a student who is used to living in relative comfort, suddenly thrust out on his own. He's been eating for the last month, but not well. Suddenly, someone appears with the offer of an unsecured credit card - now he can buy food, and pay for it later, when he's rich! After all, that's what he's in college for in the first place, to make money!

Sadly, such individuals who haven't yet learned the fundamentals of responsible borrowing are often taken advantage of by credit card issuers who use their plight to lock them into unfavorable, high-interest contracts. And once they've signed and started spending, many of them find they have little way out. Many issuers have even resorted to the tactic of using promotional items such as t-shirts and the like as an incentive to sign up for a card, thereby reinforcing the item that the credit card is not "serious business".

For many, this is one of the most egregious forms of exploitation happening today and they want to see it come to an end. In many states, including New Jersey (home of prestigious Rutgers University), lawmakers are attempting to pass bills that would block credit card issuers from campuses altogether, or at the very least, severely alter the tactics they are allowed to use. If such bills pass, then credit card issuers on college campuses would be obliged to provide each student with free access to an educational program on how to use credit responsibly. Students will be given full disclosure on important matters such as what will happen if they make only the minimum payments, what the results will be of not paying off the balance in full, as well as demonstrations of things most people never think about - such as compounding interest.

For many, this is an ideal approach. After all, there's nothing intrinsically wrong with students having credit cards, just that they're being given those cards without knowledge of how to properly use them. In a time when there's much debate going on about the best way to repair the shattered economy and prepare for a future in which we've rebuilt ourselves and returned to a culture of responsible spending, this is a major step in the right direction.