TBO.com - TBO is Tampa Bay Online

Counter-Credit Culture Begins On Campuses

ADVERTISEMENT

The Tampa Tribune

Published: October 28, 2007

Ed Mierzwinski is trying to get the word out to college students that the free T-shirt or teddy bear they accept when signing up for a credit card could end up costing them a lot of financial heartache.

For years, lenders have set up tables on campuses offering gifts to entice students into signing up for credit. The companies know that if they get these young people early, they will likely capture a customer for a long time.

Many schools have signed lucrative affinity deals with credit card companies in which they provide contact lists of students or allow sidewalk marketing by the credit pushers. It's an insidious relationship justified because the schools get needed funds or officials insist that the cards help students build a credit history.

What many students end up building is a lot of debt.

'They rely on the fact that students are vulnerable,' said Mierzwinski, consumer program director for U.S. Public Interest Research Group.

'Don't Be A Sucker'

Many students will soon be seeing tables on campuses marketing a new message. With a grant from the Ford Foundation, Mierzwinski's group is heading a coalition staging a national counter-credit card campaign. They are starting on 40 campuses. Instead of a credit card application, students will be handed literature warning them about the fees and terms of credit cards. They'll still get free items, including lollipops that say, 'Don't be a sucker.'

Of course, every campaign has to have a slogan. In this case, it's a play on Visa: 'Feesa. Free Gifts Now. Huge Fees Later.'

Consumer and higher education groups have become increasingly concerned that college students, many without a job or steady income, are getting cards without understanding the terms.

In a 2004 study of credit card usage by undergraduates, 56 percent of freshmen reported they had obtained their first card at age 18. Student loan lender Nellie Mae, which conducted the study, said that as students progress through school, their credit card usage swells. By their senior year, 56 percent carry four or more cards with an average balance of $2,864.

3 Simple Pledges

The new campaign includes a Web site (www.truthaboutcredit .org), planned publication of research reports on credit card marketing practices and an appeal to colleges to adopt the following:

•A ban on offering gifts when marketing credit cards.

•A prohibition of any campus employee, student group or campus department from accepting financial support or other goods and services from credit card banks, issuers and vendors for allowing them to market cards to students.

•A ban on the selling of any student lists to credit card companies.

'We are trying to use colleges as change agents,' Mierzwinski said. 'And maybe some will think twice and not get cards.'

College students don't need credit cards. If they don't have the money to pay for supplies, textbooks or food (the top reasons they use credit), what are they going to do when the bill comes due? They'll do what many seasoned cardholders do: roll over their balances to the next month and go deeper into debt.

In the Nellie Mae report, 21 percent of undergraduates with credit cards paid off all cards each month; 11 percent made less than the minimum required payment each month.

I have two nieces in college. Neither has a credit card. They've managed without leaning on plastic in lean times. One even spent a semester in South Africa. Some might have advised her to get a credit card in case of emergency. No need.

When she needed money, it was deposited into her bank account, and she used her debit card.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT