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Platform : ‘Credit Cards in High School Too Tempting’

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<i> Compiled for The Times by Rip Rense</i>

KARIA VELASQUEZ

Senior, 17, South Gate High School;

active in leadership class

I think (companies are trying to profit from the irresponsibility of young people), but sooner or later, students are going to be faced with credit cards and how easy it is to acquire them. And a mistake might hurt them for the rest of their lives. Eventually, you get a credit card anyhow. You might make a mistake as easily now as when you’re older. I don’t have a credit card, and no one has offered one to me. I would not take one. It’s too much of a big responsibility for me. Knowing myself, and knowing that I would have a credit card, it would be easy for me to use it--like if I don’t have money, just buy something like clothes. I talked to several other students, and they told me that students should be able to have credit cards only if they could afford to pay the bills themselves, like if they had a job. I’d rather just be responsible with the money I get from working. I work at a toy store, and I’m saving money for college.

ANGELA LIU

Just graduated from Chatsworth

High School, 17

Well, I think that the companies should look at the person’s bank account and evaluate it before they give a credit card--see if they’ve maintained their balance and have a steady flow of cash so they can actually use it. I don’t think they should just give it out to any teen-ager, because some teen-agers probably will get in over their heads. They’ll probably use the card to the limit, and then probably be unable to pay it back, and their parents would get upset and have to pay it back for them.

I have one friend with a credit card who is 18, and he uses it responsibly. It’s linked with his parents. They actually gave it to him. I think banks are doing this probably just to make a good profit on the interest charged to kids who might charge to the limit. I think they’re probably counting on young people to be irresponsible so they can profit from their mistakes. Isn’t their main motivation to make money? Yeah, I would probably take a credit card if it was offered to me because I want to buy books or whatever. I can use a credit card instead of always carrying cash around. I think I could control the temptation to buy things I really didn’t need. Because I already have an ATM card, and I can withdraw what I need if I really want it.

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MICHELLE ABT

Vice president of card marketing,

Chase Manhattan Bank

We issue credit cards to students, primarily college students. We have a small test that we’re currently running in the high school market. It consists of 5,000 cardholders, and they’re college-bound high school seniors. It’s a nationwide test. We don’t intend to market credit cards to high school students. We’re trying to preempt the competition by marketing to college-bound high school students at the very last portion of their senior year before they go to college. Because when they enter the college campus environment, many credit card institutions are after their business. But the intention is to issue credit cards to kids who will be going to college. It’s not a high school program per se. It also requires a parent guarantor. Because people under the age of 16 are not legally bound by a credit contract. They need not be 18, but their parents need to co-sign.

The test has been in existence for about six months. We have no idea whether we’re going to roll this out any further or not.

Credit and credit management are facts of life, and credit problems are not generally age-related. We have actually bigger issues with our portfolio in the adult realm than we do in the student realm. And our experience with college students has been really good. They understand the need for a credit history and a credit rating, and they live up to their obligations almost all the time.

MARIA LOPEZ

Senior, 17, Garfield High School; student body vice president

Most high school students don’t have a job, and any money that gets in our hands we waste! Well, like clothes or supplies or whatever. Would I take a credit card? Probably not. Because I wouldn’t want to get carried away, and I know I don’t have the money to pay back. I wouldn’t want to take the responsibility of having to pay back money that I don’t really have. I don’t know why the banks would do this. Probably to get more money--maybe from parents or something. If I was to spend the money and I didn’t have a job, you know who’s going to respond for me? My parents! Like I said, I don’t picture high school seniors with credit cards.

MIGUEL FLORES

Senior, 16, Roosevelt High School

Adults can’t even handle money. How can minors handle it? Some adults turn into shopaholics and have to get the credit card and cut it up with scissors in order for them to stop. Another thing is that all this processing is really too complicated. Right now there’s a lot of fraud in the credit card industry. And also, they have outrageous interest rates. Kids might not understand what’s going on, and they might get cheated by the high interest rates. I think this is happening mainly because I heard that people need to establish credit as soon as possible, and credit cards are a good thing, especially for college. The institutions are basically trying to get a head start on students to establish credit. No, I don’t think this is being done to help students.

No one has offered me a credit card. I wouldn’t take it--either a card or application. First of all, the interest rates are too high, and I’m not a person who will pay outrageous interest rates for something that isn’t necessary.

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GARY STROTH

Executive director, Consumer Credit Counseling Service of Los Angeles

I don’t have a problem with high school seniors getting credit cards, but I do have a major problem with not educating them on how to use them. I think that’s the critical point. A credit card for a high school student has to be a partnership with the parents. There would have to be a co-signer on it, and at that time there would be some education in the household--provided the parents know how to use credit wisely. And we’ve seen some who don’t. I visualize a program in the high schools that gets down to the real basics on how to budget and use credit wisely, knowing that if you do go out and shop and use credit that you are going to have to pay it back, and there has to be budget money to take care of that.

We’ve just started a joint partnership with the California Council on Economic Education to begin training the economics high school teachers on the basics of personal money management so they could entwine that into their classes. This year, we’d like to reach 250 high school teachers in L.A. County.

We have not seen any high school students yet coming in for (credit) counseling, and I wouldn’t really expect to. We do, however, see college students. (Some college students) are getting a credit card, running it up in a week or two to your credit limit because they think it’s cash, and then all of a sudden the bills start coming in and they’ll come to us for advice. Yes, we get a fair number of college students with trouble. I’d say it’s somewhere in the 10% to 15% (range). And it’s going up. It’s somewhere in the 20 to 30 (age) group that (requires) our preponderance of counseling. Talking to the counselors, we get a feel that there are more students coming in because of the swelling in the student loan situation too.

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