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Dodd warns students of credit card risks
February 9, 1998
U.S. Sen. Christopher J. Dodd visited UConn February 2, urging students to look at the fine print before entering into deals with credit card companies, and to announce he was submitting legislation in the Senate that would force the companies to disclose the true costs of running up bills on the card.
"Why do you think these companies put the financial information in small print? It's not because they ran out of room," he told students and staff in the Student Union lobby. "University students are prime targets - you're out on your own for the first time, you're handling your own finances, and you probably don't have much money."
Dodd's legislation would require credit card vendors to give an example on their solicitations showing how long it would take to pay back a loan if the borrower made only minimum payments each month. To dramatize his point he displayed a large sign indicating that a $3,000 bill incurred this past Christmas would take 33 years and, ultimately, cost the consumer nearly $10,000, if only the minimum payment were made each month.
April Claxton, consumer coordinator for ConnPIRG, who coordinated Dodd's visit, said a recent survey the UConn chapter of the citizen watchdog group sponsored showed that 74 percent of UConn students have at least one credit card, and 60 percent have more than one.
"Students with little or no income are being offered credit, sometimes with disastrous effects. Only a little more than half the students pay off their balance in full each month, and of those that don't, 88 percent did not know how long it would take them to pay off their debt if they only paid the minimum balance each month," Claxton said.
"Students who need a credit history when they graduate are instead finding themselves coming out of school with bad credit," she said. "It isn't right."