Schoolboy Moves Bricks for 8 Days to Repay Apple iPhone Debt
by Cecilia Miao on Thursday, April 4, 2013
From NetEase:
University Student Moves Bricks at Construction Site for 8 Days to Repay Apple iPhone Loan
Yang Fan (pseudonym) is an art major student at a general university in the city [Chongqing]. Under a relatively good financial situation in his family, he applied for a credit card when he was a freshman. He said, “We need to buy paints and go out to do drawings. These all cost a lot of money. Plus I spend money loosely, so I applied for a credit card from the bank.”
Last year, Yang Fan bought an iPhone 4 with credit card financing. “The first bill only asked for 667 yuan (including a processing fee of 250 yuan), and the remaining 11 installments would be 417 yuan per month. At the time, the iPhone’s price hadalready dropped, so the total installments were about 1000 yuan more than the actual retail price, but there was nothing I could do either, because I couldn’t pay that much money all at once,” said Yang Fan.
Yang Fan spoke frankly, that though he only has to pay back 400 yuan each month, due to his inability to control his spending, he often would borrow money. “Without a choice, I could only go to a construction site to help move bricks, where I could get a 100 yuan per day. Whenever I was short on money in a month, I’d go to the construction site and carry bricks for a few days. I don’t work more than I have to, just enough to pay back the credit card debt. Each time, I’d work 4 days, and I ultimately did it twice, so a total of 8 days.”
Yang Fan told this Chongqing Morning News reporter that moving brinks was something he did because he had no other alternatives. “If I had the option, I would rather give up this iPhone 4. Moving bricks in the construction yard is not your ordinary exhausting, and I had blisters all over my hands those few days, extremely painful.” This is not the lone case of college students spending on credit. Chongqing Industrial and Commercial University senior student Xiao Cao said, based on what she knows, there are two classmates using credit card financing to buy cell phones and laptops.
According to the news lately, the Wuhan Jiexin Company, which specializes in providing small consumer loan financial services in Wuhan, has stated that in the past year, it has provided loans to more than 20,000 Wuhan college students. These students loans are mainly used to purchase Apple branded cell phones, laptops and other electronics.
According to reports, a loan company’s highest annual percentage interest rate exceeds 40 percent. Are these kinds of low-barrier, high-interest businesses creating new services or consumption traps? If the students default, then who’s left with paying the bill…? In fact, there are quite a few college students buying iPhone with loans, with some students blindly getting loans just to look good, while “suffering unbearably” when it comes time to repay.
Experts: Debts fall on the parents; not worth it
During the interview, many small loan companies in Chongqing said they don’t have services targeting college students. A customer manager from one of them spoke directly, “college students don’t have any ability to repay the loans at all.” With regards to university students using installment payments to buy iPhones, Blue Ocean Financing Guarantee Co., Ltd Creative Investment Department CEO Assistant Wei Xulong believes that some media reports are a little exaggerated. In reality, as long as the loan amount is 10,000 yuan and under, most students can use a variety of ways to repay the debt, without causing too much harm.
As for the small loan companies, as long as the loans reaches a certain level/scope, there wouldn’t be too much risk either. However, he emphasized, “I think college students should minimize taking on loans for purchasing things. If it is a loan for entrepreneurship, banks have plenty of favorable policies, whereas consumer loans can become a considerable burden for college students who do not have much income. In the end, these reckless debts will fall on their parents, and if that happens, then it’s not worth it.
