The Era of Unfettered Marketing of Student Credit Cards May Be Coming to an End
View PDF | Print View
by: barrywaters
Total views: 130
Word Count: 483
Solicitations for student credit cards on college campuses are as common as fraternity sweatshirts. Companies pushing incentives to sign up for student credit cards have been allowed to station themselves in student unions and on outdoor quads for years. Young adults in college are a perfect market. Many are on their own for the first time and long for the independence and freedom of adulthood. Student credit cards may seem like the perfect ticket to financial freedom. Many state legislatures and college administrators, however, feel that credit card companies are taking advantage of students at a time when many are very naive about financial obligations and do not yet understand the long term consequences of debt. For example, solicitations for student credit cards on the grounds at Rutgers are no longer allowed. Other campuses may see changes soon, as many state legislatures are cracking down on practices regarding the marketing of student credit cards. Legislatures in four states have already established bills to tamper some company practices around student credit cards on campuses in their states. The first week of February, New Jersey joined the list of states trying to crack down on predatory solicitations of student credit cards on campuses. Lawmakers announced a bill that would make it mandatory for banks to offer financial seminars and programs before any student credit cards could be distributed to new applicants. The programs must provide an understanding of how debt affects credit, how interest on balances is calculated, the different interest rate terms and the consequences of not paying balances in full each month. The bill also limits sales gimmicks, so students are not wooed into applying for credit cards just to get the free pizza or shirt. Lawmakers believe restrictions in the bill will help protect students from making poor financial decisions that could have long term consequences. Credit cards can be a useful financial tool, if used appropriately, and legislators want to give students a chance to make sound decisions about those cards.
The state of the current economy has left many consumers reevaluating their spending habits and credit behaviors. The years of a booming real estate market and economy left some feeling they could spend freely without consequence. The financial events of the past year has many now rethinking their habits and trying to pay off accumulated debt on credit cards and elsewhere. State lawmakers and college administrators who are trying to restrict marketing practices regarding student credit cards are hoping they can keep young people from establishing bad credit habits early on. By providing protection for vulnerable and financially green students on campuses, perhaps it will help build a foundation for responsible consumer spending. Related Articles Bad credit credit cards - Credit cards for bad credit - Credit card applications - Credit cards -
About the Author
Research on best credit cards, visit getsmart.com/credit-cards.
Rating: Not yet rated