Students Become Prey for Cards Charging 18% After Free Lunch
by admin on May.11, 2009, under Business News from America
By Alexis Leondis
May 8 (Bloomberg) — Irena Cabrilo got a free lunch during her freshman year at the University of North Texas in exchange for signing up for a credit card from Bank of America Corp. Eight months later, she was carrying a $1,500 balance and struggling to pay an 18 percent interest rate.
“They made it sound so easy,” said Cabrilo, now a senior majoring in marketing and advertising. “Just sign up, you’ll get approved and have access to money. They don’t talk about interest rates and what will happen to your credit history.”
Average credit-card debt among graduating college seniors increased to more than $4,100 last year from $2,900 in 2004, according to a study by SLM Corp. About 85 percent of students have at least one credit card, according to the study, conducted every four years by Reston, Virginia-based SLM, also known as Sallie Mae, the largest lender to U.S. students.
The Senate may vote on a bill as early as May 11 that would prevent credit-card companies from targeting college students such as Cabrilo by requiring parental consent for a borrower under age 21 unless there is proof of independent income or completion of a financial literacy course. A Senate panel approved the restrictions, which also limit credit-card interest rates and fees, in March.
“Credit cards should be a leg-up for college students, not a leg-trap that snares them in unbearable debt,” said Senator Charles Schumer, a New York Democrat. “This new legislation will help protect students from unfair lending practices.” (continue reading…)
Fresh Look at Strategy Under Uncertainty
by admin on Mar.23, 2009, under Business News from America
by McKinsey
Although even the highest levels of uncertainty don’t prevent businesses from analyzing predicaments rationally, says author Hugh Courtney, the financial crisis has shown us the limits of our tools—and minds.
Hugh Courtney’s book, 20/20 Foresight: Crafting Strategy in an Uncertain World, was published the day before the terrorist attacks of September 11, 2001. As the economist and former McKinsey associate principal recalls, in the following weeks interviewers often asked him, “Does this change everything? Is this stuff still valid? The world is so much more uncertain.” Says Courtney, “The honest answer then was that the only thing that had changed was our perception of risks and uncertainties that were always there. And it’s the same answer I give today about the current global business and financial situation.” One of Courtney’s contributions to the literature of strategy was a four-part framework to help managers determine the level of uncertainty surrounding strategic decisions. In level one, there is a clear, single view of the future; in level two, a limited set of possible future outcomes, one of which will occur; in level three, a range of possible future outcomes; and in level four, a limitless range of possible future outcomes. Courtney, an associate dean of executive programs and professor of the practice of strategy at the University of Maryland’s Robert H. Smith School of Business, discussed the relevance of this idea in a recent interview with the Quarterly. (continue reading…)