WVU students, Financial Aid official discuss credit cards with Sen. Rockefeller

March 8th, 2010

For Nicole LaPresta, easy credit meant halting her education for a while to repay the debt.

LaPresta’s story is not unusual, as a roundtable sponsored by Sen. Jay Rockefeller heard Monday (March 8) in Morgantown.

Rockefeller, D-WV, joined consumers, social service providers, students and legal advocates to discuss consumer protection, fairness, and new laws in place to make sure that all West Virginians and Americans are treated justly when it comes to their credit cards.

LaPresta, now a student at WVU’s College of Law, shared her story of credit card struggle. She explained how she was solicited on campus at California University of Pennsylvania, where she was attending as an undergraduate. At 21, LaPresta had accrued more than $10,000 of debt and at one point was carrying nine credit cards. She was forced to drop out of school to work full time to pay her bills.

“I got to the point where I did not know what to do anymore,” LaPresta said. “I was never told about interest rates, minimum payments or the fine print.”

Others recounted similar experiences.

“Many students have to use credit cards to make up the difference between the financial aid they are able to receive and other expenses that they have,” said WVU Director of Financial Aid Kay Widney.

Overall, Widney said a recent survey conducted by the WVU Financial Aid Office showed many WVU students are being responsible and careful with credit cards.

The survey revealed that 46 percent of respondents had no credit card; 30 percent had one credit card; 11 percent had three or more; 51 percent pay off their balance each month; and 75 percent owe less than $500, she said.

Widney also shared several ways WVU is trying to educate students about credit cards, such as including financial management in the required freshman orientation class, University 101; suggesting that students research loans and credit cards carefully; and offering “Cash Course,” an online financial management program. (Cash Course can be accessed at www.cashcourse.org/wvu .)

The Credit Card Accountability, Responsibility and Disclosure Act, which took effect in February, will benefit students in a variety of ways.

Under the new legislation:

  • Consumers who are under the age of 21 are required to provide proof of eligibility to pay, or have a cosigner.
  • Solicitation tactics on college campuses are limited.
  • Credit card companies are required to notify consumers at least 45 days prior to any rate increases or changes to account terms.
  • Companies are required to tell consumers how long it will take to pay off balances if only the minimum monthly payments are made, and how much consumers must pay each month to pay off their balance in three years.
  • Companies are prohibited from raising interest rates during the first year and on existing balances, except under limited circumstances.
  • Consumers have the option to choose whether or not to opt-in to over-the-limit transactions and fees.
  • Companies must give consumers the opportunity to pay their bills on time by mailing their statements 21 days before the payment is due.
  • Payments that exceed the minimum monthly requirement must be applied to balances with the highest interest rate first, so people can get out of debt faster.

Students and consumers who have questions about the new credit card laws, or those who are having problems with credit card companies, are encouraged to contact one of the following agencies:

To opt-out of receiving pre-approved credit or insurance offers in the mail call 1-888-5optout .

For more information on WVU’s Financial Aid Office, visit http://www.finaid.wvu.edu/.

By Colleen DeHart
Communications Specialist
WVU News and Information Services

-WVU-

cd/03/08/10

CONTACT: Kaye Widney, Financial Aid
304-293-2831, Kaye.Widney@mail.wvu.edu

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