Analysis Of 'Strapped' By Tamara Draut

Throughout the extract, “Strapped,” author Tamara Draut notes why today’s young adults have complications getting financially ahead. Along with student-loan debt, today’s college students may also leave with the burden of credit card debt. Draut argues that college campuses aren’t sufficiently regulating card companies on campus, therefore putting their students at risk for debt.

Credit cards have become increasingly popular world-wide, making it easier to buy now and pay later but are they actually helping or hindering someone’s credit? “Maxed Out” by James D. Scurlock demonstrates how credit cards can hurt someone’s credit, while “Why Won’t Anyone give Me a Credit Card” by Kevin O’Donnell demonstrates how someone may have financial stability to pay off a credit card, but still be consistently denied one by the credit card companies. Owning credit cards is not the problem; the problem is being irresponsible with it.

The explosion of credit card use among college students has woven itself into the fabric of campus life ultimately impacting how students interact and begin in the financial industry. As students gain more freedom away from home they often begin to experience various social changes. One area in particular that is cause for concern is the number of students incurring credit card debt. Due to growth in credit card usage and the rise of debt, the ideas discussed in this paper represent the growing need to evaluate credit card company solicitation efforts aimed at students and how to begin negotiation to amend these practices. Through mediation, the focus will be to investigate if college students receive ample education on credit and

When we think about college and a college education, it seems as though our first initial thought is the student loans and debt that can result in achieving a college degree. Looking back, student debt has risen drastically and has made it extremely stressful for students and families. Many people go through their entire life in debt, especially from being a student. Student debt has always existed; however, now, it is so extreme, almost all students who attend college find themselves deep in debt, and must continue paying off their debt many years after they graduate. For the past two decades, student debt has risen, illustrating how big this social problem has become. The reason student debt is a significant social problem is because of how much it can effect a person’s life, and their families lives, that can carry over to their future. Although there were many things that led up to and impacted the drastic student debt that is now being faced by many students around the world, the corporation Sallie Mae, was the essential factor in why student debt has skyrocketed to unreasonable proportions. Sallie Mae provided the first type of corporation that changed its focus from helping students, to helping themselves. The history and scope of the student debt can help us understand that the corporation, Sallie Mae, was the main cause of this problem.

Many colleges and alumni groups have a stake in marketing to students. One would like to think that colleges operate solely under the best interest of their students. For the first time in U.S. history, student debt has surprised credit card debt; the amount of outstanding student loans is expected to exceed $1 trillion in 2011, according to the Project on Student Debt (Sourcebooks 2011). With the growth in number of college applicants over the past decade, universities and colleges seem to be capitalizing on market principles by charging what the market will bear. This brings satisfaction to university presidents and leaders and allows for additional school expenditures. Many students would not be able to afford their college expenses without the use of student loans and credit cards.

Every year across the United States millions of high school students are ecstatic to finally graduate and begin their lives in the “Real World.” A student is excited to finish years of consecutive papers, 8am classes, and endless homework. Although beginning college is something a newly graduated high school student might be happy about they will soon become unhappy with the affects of it. The Columbus Dispatch created an ad that grabs readers attentions with detail and shows a simplistic image that will make readers remember what they just saw. Showing a large snake with the label “Debt,” swallowing up a freshly graduated high school student, grabs reader's attention and makes them realize how student debt in college can take over a student’s life.

I owe $40,000, I owe $60,000, I owe $100,000. Isn’t that a lot of money for one person to owe? Graduates have been faced with a serious problem brought about by the constant borrowing of money to gain a reputable education. The debt of loans varies from person to person but the extreme amounts that individuals owe is something the media finds worth gossiping about. Little does the public know, in reality, all the commotion and conversation about these debts are not accountable for the majority of college borrowers. According to A Lifetime of Student Debt? Not Likely by Robin Wilson, she intrigues her targeted college audience by giving examples and providing awareness that most individuals are paying back their students loans within a timely manner with just a few sacrifices. Wilson emphasizes that the real reason individuals have an outstanding debt is because “they are determined to attend their dream college, no matter the cost” (257). There are various reasons why students take out loans and Wilson is determined to clear up the confusion of student debt, she encourages college students to take out loans even with media’s negativity, and lastly she tries to enlighten this targeted college group that debts are repayable with additional sacrifices but in the end, that debt was the best decision they have ever made.

In the United States today, the number of students graduating college with student loan debt is quite astonishing. In the article titled, “How the $1.2 Trillion College Debt Crisis Is Crippling Students, Parents And The Economy”, we will examine and break down the student loan debt crisis by the numbers. Today, almost two-third’s of students graduating college are graduating with an average of $26,000 in debt. For most students, $26,000 is a lot of money when the average annual income for a first year graduate is only in the mid $40,000 a year range. According to the Consumer Financial Protection Bureau, student loan debt has reached a new milestone, crossing the $1.2 trillion mark (Denhart, 2013, Introduction, par. 2). With student loan debt levels

According to an article by CNNmoney.com, a survey done in 2008 by the U.S. Public Interest Research Group found that 80% of students received direct mail from card companies, and 22% said they received about four phone calls a month, on average, from these companies. This extremely persistent marketing and extreme lack of financial experience and discipline leads many college students into serious debt. Students are also a large target because credit card companies know that they often hold onto their credit cards until adulthood; and this is how one builds loyalty to a company. Also, if they fall into severe debt, parents are more likely to help bail them out than parents are likely to bail their adult children out (Dickler). In a survey taken of college students, 66% said that they do own credit cards already, and more than half of that 66% say they use

Financial literacy is essential in living in today’s society, therefore it should be taught at a young age because people have been going bankrupt more than ever before. According to Kelly Walsh, “Students between ages 18-25 have at least one credit card. By the time they graduate half of them have four or more credit cards that have an average balance of $3,000” (Walsh). If students were taught at a younger age how credit cards actually work; they would better understand the consequences of debt. For instance, if students were to research different credit

First, we must blame ourselves for letting this debt build up. It’s so easy to just say “charge it” and deal with the money later. It’s so much more convenient to use a credit card then using our cash. In the April 2005 issue of University Wire, Dr. James Roberts conducted a study about the spending habits of students around the country. He found that students who used credit cards to pay for their books weren’t able to tell within $30, $40, or even $50 dollars of how much they spent compared to the students who used cash and were able to tell within a few dollars how much they

companies assertively targets college students because they are expected to have a higher than average power for earning, which make them a perfect targeted market. Credit card companies use gift tactics by offering the latest iPod, an exotic vacation, a computer, frequent flyer miles or an initial low to zero percent interest rate and even cash to entice college students to apply for credit cards. In fact, many students only get a credit card initially because of these incentives, but soon become accustomed to the convenience of just pulling out a card to pay for purchase due to want and not because of need. As Kamenetz (2006) stated, “Students are living in the present at the expense of their future” (p.13) (Gresnick, 2006).

The question of whether credit card companies should market on campuses or not, brings many different opinions, some of which are driven by personal experience and some that are driven by profit. There are those who do not agree with this because they know what they have gone through with credit card debt. There are also those who say they should market on campus because they are adults and contribute to the company’s profit. Even though students are adults and need to earn credit, credit card companies should not market to college students on campus because they are too naive and this results in graduating with too much debt.

In the same way college students struggle with the same problems as those in there 40s. On college campuses, “70 percent of college students possess at least one credit card” (Norvilitis). The trend towards credit cards is not only a college problem; Americans as a whole have increased the number of credit cards they have. The concept of buying whatever you want when whenever inclined is a considerable selling point.

Credit cards are used as a foundation for setting college students up financial future. Although this may be true, it can also bring you down every time you swipe. The purpose of this paper is to illustrate that credit cards can be dangerous because it can lead to debt and the toll it could take on the future financially. College graduates in their late 20s can face three major issues such as overspending, high interest rates, and possibly low credit scores when dealing with credit card debt. Strategic recommendations include not only being careful when using credit cards, but also limiting yourself to what you can afford so that you will be able to look forward to other possibilities in your financial future. These possibilities include, but are not limited to, buying a car, a house, a boat, vacation, etc.