Students overwhelmingly support fair campus credit card marketing principles

Rein in “out of control” credit card company marketing, nationwide survey finds

University of Maryland, College Park, MD—Students overwhelmingly support limits on campus credit card marketing, according to the results of a nationwide USPIRG survey of over 1500 students at 40 colleges in 14 states including the University of Maryland College Park.

“Campus credit card marketing is simply out-of-control,” said Chris Leuchten, Maryland PIRG campus chapter, “At tables on or off campus, or on your phone or in your mail, there’s a credit card company making a pitch to get into your wallet, even if you cannot afford to pay the bill.”
 
The survey findings come as state attorneys general and Congress are also investigating the enticements that the credit card companies rely upon to trap college students into applying for credit cards that have bad terms and conditions, Leuchten said.
 
“Credit card companies are desperate to expand their already massive profits and the best two ways to do that are either to gouge existing customers with tricks and traps or recruit new customers,” added Lauren Kim, Maryland PIRG Campus Chapter Chair. “Colleges are a mother lode for finding new customers because students live close together, are in need of credit and, like everyone else, are attracted to free food, free t-shirts, and other free offers. The catch is sometimes they get a card they don’t need or cannot afford.”

Among the key findings of the “Campus Credit Card Trap,” were the following:

• Three of four students (76%) reported stopping at tables to consider offers or apply for credit cards. Of students who reported stopping or applying at on-campus tables for credit cards for free gifts ranging from t-shirts to blankets to “sandwiches” or “pizza” or even “an iPod shuffle.”
• Four in five (80% of students supported one or more fair marketing principles. Nearly three-in-four students (74%) asserted that only cards with fair terms and conditions should be marketed on campus. Students also overwhelmingly (67%) opposed the sale or sharing of student lists (which can include home and dorm addresses, email addresses and land line and cell phone numbers) with credit card companies.
• Nearly two in three students (66%) reported that they had at least one credit card. Of these, 30% reported that their parents paid the bill. Thirty-six percent (or just over half of the remainder) reported that they paid the full balance on their primary card each month and just under half (34%) reported carrying a balance from month-to-month.
• Of all respondents, whether they had a card currently or not, one in four (25%) reported paying at least one late fee; 15% reported paying at least one over-the-limit fee and 6% reported that a card had been cancelled for non-payment.

Leuchten said that the release of the survey was part of Maryland PIRG’s ongoing truthaboutcredit.org campaign to rein in unfair campus credit card marketing. In addition to the release of this survey and other future reports, the group’s activities include:

• A FEESA (Sounds like VISA) campus credit card counter-marketing campaign. “Our representatives dress like credit card vendors and set up tables, too, but instead of handing out free gifts, we give out credit education factsheets and “don’t be a sucker”” lollipops,” Leuchten said.
• Ongoing efforts to urge college administrations to adopt the Maryland PIRG campus credit card marketing platform, which calls for a ban on free gifts, a ban on selling or sharing student lists, a ban on campus sponsorship of marketing and increased financial education.

“Even though some schools or states have restricted campus credit card marketing, it’s clear that more needs to be done,” concluded Leuchten. “Without concerted efforts to keep the marketplace on campus fair, then banks will keep finding new ways to get bad credit products into students’ wallets.”