On credit cards for students...

It never ceases to amaze me, of how people know a problem, see its coming, and would still go down that path of destruction, then turn around and complain they don't know it's coming after they self-destruct.

We heard the same story about the subprime mortgage mess, and how those subprime borrowers should never have been qualified for a loan, but were embraced and sought out in open arms by banks and mortgage brokers for mortgages (often exotic types like options ARM).

There's the usual defense that the borrowers don't know about it, predatory lending practices and what-not. It could well be true that those subprime borrowers who are ethnic minority and who know little English, could be naive enough to rely solely on the advice (often incomplete, and worse yet, untruthful) of banks and brokers.

But, could the student credit card holders claim the same defense? We all know that if the credit market and bank lending do not unfreeze in 2009, the credit card market could well be the next victim in this prolonged economic mess, starting from 2006 with the subprime debacle, to the implosion of property market, to high profile bank failures and bailouts.

These students, allegedly, are going to colleges. They are not supposed to be naive or ignorant. Could they have claimed that they don't know what's happening (the high interest rate on card balances), like the subprime borrowers did? Sure, I don't know it's ethical at all for colleges to "sell out" details of their students and alumni to banks and credit card companies, in exchange for financial rewards to help with their depleted school fundings. But there's no denying that the bucks stop with the students themselves.

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I still remember well, my very first credit card. It's an American Express card I got from my college days. I like it that Amex was still not as popular as Visa or Mastercard, which makes me feel somewhat "special" (kinda silly, huh!?!). I have had the same Amex ever since. I never carry a balance. In fact, there were long stretches of time when I didn't use it at all. But I carry it with me when I relocated to various parts of the world. (That is the other reason I like Amex, since it's truly international and global, unlike Visa or Mastercard, which are issued by local banks.) Come to think of it, call me an old fool, but I pay the few hundred bucks of annual fees to still keep the Amex with me, mostly for sentimental reason.

It never occurred to me that I should go out and buy/spend, simply because I have a credit card. This is not to say that I have the money, ever since college days. Quite far from it, I often worked more than a few jobs simultaneously through college days to earn the money, just to scrap by. But I never thought of putting expenses on my credit card, since I knew I need to pay back, with interest. If I don't have the money, I cut my expenses, or find more jobs. So, how hard is that to understand those simple rules?

Surely, those simple rules can be hard to stick with, judging from my husband's credit card debt back then in his college days, when he racked up balances on his card just to call me long-distance and send me flowers and heart-shaped pizza. I admired his courage and determination to get rid of the credit card debts when I told him he didn't need to do all those to impress me. So, he gave me his card for safe-keeping, resolved to using just cash, and repaid his $3,000 in credit card balance within a year, with his stipends and salaries as lab assistant and tutoring.

It's always easier to blame others for our own problems, but we have to own/face up to our problems, in order to try to resolves. There is no free lunch in life. As simple as that.