Most Hartford-area residents will remember how credit cards took off in the 1980s as a way for people to live a little beyond their means. By the 1990s, however, we were living too far beyond our means and getting into trouble. Today, we understand that credit cards themselves are not bad, but credit card debt is.
Credit cards are good for emergencies, like the expensive car repair you didn't see coming or a new dishwasher when yours gives out without warning two days after the warranty expires. However, it is much too easy to use them too frequently and rack up so much credit card debt that your finances suffer.
Concern over excessive credit card debt is part of the reason why the University of California Los Angeles (UCLA) recently announced it would no longer be accepting Visa cards for payments made on campus and would being tacking a penalty 2.75 percent credit-card fee on each Discover, American Express or MasterCard transaction. Another reason for the move is that UCLA wants to stop paying the credit-card companies their fees, but its administrators also had concerns about students making large tuition payments, deposits and room-and-board charges with their credit cards. Such charges are very expensive, of course, and it is unlikely most people could easily pay them off.
It is nice of UCLA administrators to look out of their students like this. On the other hand, this move might be bad for lower-income students who may be getting through school on credit. And of course, some people just like to use their credit cards so they can get rewards like frequent flier miles and then dutifully pay the card off each month.
What do you think? Was this a good move on the part of UCLA, or should people be able to use their credit however they'd like?
Source: Forbes, "VISA Is Banned On UCLA Campus - Students With Credit Cards Penalized," Ilana Greene, 28 June 2011.