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Subprime Loans Just the Start of Students’ Debt

18 | By Shah Gilani

This is amazing.

If you’re about to become a college student, if you’re already a college student, or if you’re simply in debt and need more credit and plan on becoming a student again, you’re in luck.

Financial services giants Discover Financial Services Inc. (NYSE: DFS), Capital One Financial Corp. (NYSE: COF), Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), and U.S Bancorp (NYSE: USB), to name a few players in the student credit game, are bending over backward for you.

The folks at Discover want you to “Get the card for college and beyond.” They’ve named and registered it as “Discover it chrome for Students” because, after all, they’re “Looking out for you.”

But they aren’t the only do-gooders looking out for you. You can also apply for the Capital One Journey Student Rewards Credit Card, the Bank of Americard for Students, the U.S. Bank College Visa Card, or the Citi Dividend Platinum Select Visa Card for College Students.

Heck, why not apply for all of them?

But wait.

Before switching screens to sign your life away – I mean, fill those applications out – let me tell you a little more about this latest attempt to take all your money.

Understanding Your Needs

Don’t worry. The credit card companies know all about your student loans – or the loans your parents took out for you. Or that you are parents who have more to learn because you don’t have the job skills you need to pay down the debt load you already carry. They know that, after all the money you’ve already borrowed, you still need more.

They get it.

You need to buy books, food, and gas to take you to and from campus. Or maybe you just want to throw down a card for beers and wings for you and your friends at the pub. They get it.

Not all financial service companies get you. Some get you more.

Take the good people at Discover.

They want to incentivize private student loan borrowers earning a 3.0 or better with an inspiring 1% cash-back reward on what you spend. That’s chrome! It’s better than gold.

To be fair, these are hardworking students. No not “hardworking” as in having a job, but “hardworking” as in debt-building future indentured slavebots.

But that’s just the beginning, and it gets better. If you don’t have a 3.0 and are just an average idiot, you are rewarded with 2% cash back when you use your chrome card for gas or at restaurants, up to $1,000 in combined purchases each quarter.

And the 1% cash back for you smart kids, well, there’s no cap – so spend, Smarty, spend!

To keep earning all that cash, you just have to stay in school and keep up that 3.0. Who knew?

Oh, you’re thinking there must be a catch. No, there isn’t. It’s all good.

It’s academic.

There’s no annual fee. Paying late won’t raise your annual percentage rate (APR). There’s no late fee (on your first late payment). There’s no over-limit fee. There’s no foreign transaction fee… and you thought that semester abroad was out of reach.

You have a $0 Fraud Liability Guarantee, so you’re never responsible if you lose your card at a rave. The card is accepted at 9 million merchants nationwide. And because you’re up studying late, you can pay your bill up to midnight the day it’s due, by phone or online.

You are online, aren’t you? No?

Then, use the card to buy a computer – duh.

Why am I singling out Discover? No, the folks there didn’t pay me to advertise their student cards.

It’s just that on their website they compare how they stack up to Capital One, Bank of America, U.S. Bank, and Citi. And, for now, they’ve got those slackers beat. But I expect the dark horses will run harder when the school year kicks in shortly.

Speaking of coveted student borrowers, Discover CEO David Nelms recently said in an interview with American Banker, “They’re going to grow into more substantial relationships over time. And so we’ve launched a product that is a little more targeted toward them.”

If you’re a student, check your back to see if you have a target there. If you do, welcome to the already overcrowded club of financial services servants.

Oh, and about that interest rate, it’s only 19.8%. And you didn’t believe me that there was no catch.

18 Responses to Subprime Loans Just the Start of Students’ Debt

  1. Terry says:

    Will they be like the Okies in the GD/dust bowl, lose everything and have to move to CA eating their grapes?

  2. Milo says:

    I heard that in other countries, you are fround about when you pay with credit card. To them, it’s like you are living on borrowed money to eat, it’s a shame!
    Then there’s the debit card, which is another form of help.
    With cash, the mind registers more harshly what you want to buy, thus makes you spend less.
    Eventually, only the strong minded survive any crisis.

  3. northwind says:

    hey, but unlike your student loans you can run up a big balance and bankrupt yourself out of these. take a course in school for it.

  4. Ken says:

    We will all eventually become serfs to the 1%. They’re buying the politicians, the Extreme Court, and all the rest of the country so that they can become the “nobility” of the future, well ensconced in their palatial mansions, while the rest of us slave away at all of the menial jobs they think up for us. It doesn’t matter that the whole country will be a total mess, because they will be in control. They are already building the prisons (excuse me, “apartment complexes”) in which we will be kept. The plumbing won’t work any more, we will experience the worst epidemics and pandemics the world as ever seen, because of the filthy water and manufactured, substandard food full of chemicals, some of which are toxic. They are already working in that direction with anti-freeze in some of your ice cream (Propylene glycol) and neurotoxins, such as aspartame, in most of your food, not to mention artificial coloring and flavors, as well as all of the other things the food manufacturers can think up. Your income will be minimal, because the 1% will completely own you. You will of course have only the education you need to perform whatever work they require of you, which will be very little.
    Think I’m totally wrong? Look at what is happening to our educational system right now, and the fact that the real income of American families has been decreasing for the past twenty years. The total debt is increasing, because people and the government are still icing up debt to try to maintain the standard of living they had during the 80’s. The cars, appliances, etc. that we buy are increasingly shoddily built so that they must be replaced much more often, because there is nobody to fix them any more. Inflation is hiding behind decreases in quality and quantity, because of the average person knew the real inflation rate, the sheeple would not be as easily managed and dogmatized as they are now.
    This has happened twice before in history an

    • Ken says:

      and the signs are all there for everyone who will do the historical research.
      you do not have to believe me. The details will be somewhat different, but the Yesult will be the same. This whole thing will probably require 200 to 500 years to work through, unless we wind up with a theocracy, such as that of Iran. Then the time required is anybody’s guess — 1,000, 2,000 years? Who knows?

      • Hayrick says:

        seems that dark ages are about to return – this time we have the internet, so will it be different? – guess that those satellites can die too (or be shot down). We are the producers so we better get ready with a new currency or exchange system and go below the radar before we have to rely on the Companies daily ration cards/…paper dollars!.

      • Pam Ausley says:

        Ken, I’m hoping that you are a young person and there are millions as prescient as you to carry out the revolution we will have to wage to overthrow the oligarchy in control. I am 70 years old and fear I don’t have lone to fight. Hope is in young people.

    • 48ozhalfgallons says:

      Ken, you are an optimist. You have used the word “will” rather than “have” and “are”. Our only hope for a change in course is our blood. The elite will hold on to their power as tenaciously as liberals hold on to their love of government control. Can you see the relationship?

    • Sailor Jo says:

      You are right except one point. The food industry will poison us so that we will need no more health care and robots can do our jobs.

  5. John says:

    Can foreign student apply for this loan and what happen if something bad happen, e.g, the student fail most of the test and get drop out of school, therefore he/she cannot get a job to pay the loan, so how? Can we apply to some Federal welfare fund to pay for the loan? Finally I think any students might consider of default the loan payment, declare bankruptcy or even renounce their US citizenship, my guess is the student will still be the overall winner and get free money with no debt, isn’t it? 😀

    • Herb Klein says:

      In the very small print of your student loan agreement you will probably find that one will not be able to declare bankruptcy. You would truly be indentured. The devil is in the details. So read the small print.

  6. Mitchell Krasny says:

    I have been a Discover Card user since 1986 and I estimate that I’ve paid them less than $5.00 interest over those 28 years, as I always pay my bill in full every month. The $5.00 occurred while I was on a three month vacation in Spain and my mail got loused up one month. If you pay your card off every month, a credit card is a great convenience. If you let the bill increase for whatever reason, you are in trouble. Getting 1% back is a better deal than (at today’s rates) most banks pay – and I also have a Discover card that pays 5% back on automotive spending. Of all the credit cards on the market, Discover is probably the best for those who pay their bills every month. None of them are good if you don’t.

  7. Edouard D'Orange says:

    All these cash back and rewards cards are just marketing tools. While you earn the cash back and purchase rewards, you pay more in interest. I have a Platinum card without the rewards and the interest rate is 9.99% with no annual fee. The one other card I have has the rewards, etc, but the interest rate is 14.99%. I can never earn enough to get rewards, so the promise of rewards is useless.

  8. EdInvests says:

    I will be 70 by the end of the year and remember the flood of credit cards in college and even when I graduated high school. I had cards for all major gas stations, back when they did that, and it was almost a given fact that you got better credit by having credit cards. The major difference is that I did not consider them free money to spend. I never used any of the gas cards and used the true credit cards very rarely, paid the balance on time, and had the common sense to know it was debt that had a penalty. I can only assume from your statements that the college kids today were taught nothing by their parents, never handled money before, and probably have no business being in college if they don’t understand the basics of how credit cards work. I lived more like a debit card of today. If I didn’t have it, I didn’t spend it. I think your comments are more a slam on the students of today rather than the credit card companies you seem to be angry at. If the college kids with good GPAs don’t understand the basics of personal finance, we have a far more serious problem in America than the companies issuing cards. Put the blame where it belongs.

  9. RUSS SMITH says:

    Hi!, Patrons Of Wall Street Insights & Indictments Et Al:

    In his book, The Triumph Of Gold, published in 1987, Dr. Franz Pick states that the largest Industry in the United States (if we should still call it the United States?) is corruption; 5 times the size of the entire American Automobile Productions with one exception which is it pays no taxes! Due to inflation destroying the purchasing power of the US $, he also states that US Bonds are certificates of guaranteed confiscation! On the front of his book is the picture of a tombstone depicting the death of the US $ as an advanced obituary. As the old stand-by US World Reserve Currency $ gradually dies civilization grows restless and discontent. Should we therefore read Nesta Webster’s book, World Revolution or the Plot Against Civilization? It seems highly inferred to me through these past tense informative books that seem significant in today’s chaotic world that what’s needed is a divine intervention something like the world experienced when the Star Of Bethlehem arose for the Wise Men to follow!!

    RUSS S., CA> (One Of Our Broke, Fiat Money States)
    resmith1942@gmail.com

  10. Bob Rice says:

    I have over 15 credit cards,I have NEVER used even 1 of them, but,they continually show up in my mail box,I don’t activate any of them,(I have them locked up in my safe) using A credit card,without paying them in FULL every month is stupid,reading about some of those cards,they charge between 19.9 and 25 % interest,I also receive zero balance checks,those I use,I bought my granddaughter a new car,using one of them,then just before the zero balance expired,we used another one from a different bank,so we got 2 years of free money,and paid the car off,with NO INTEREST,,,

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