Unethical Credit Card Recruitment Strategies on Campus
Unethical Credit Card Recruitment Strategies on Campus Mike Martin Com/156 02/13/2011 Patricia Bille Credit card companies use unethical practices in their recruitment of college students resulting in long-term debt for many young adults. An increasing number of young adults are finding themselves graduating from universities saddled with enormous debt. At a time when they should be filled with the excitement of starting their careers, and the promise of eventual job security, some of these hopes are overshadowed because of overwhelming and seemingly insurmountable credit card debt.Although anyone, at any age can unknowingly fall into the hidden traps of credit debt, college students can make easy targets for unscrupulous tactics by some companies.
It can start innocently enough. Credit card company representatives visit college campuses with the goal of recruitment. Specific incentive packages are offered to entice students into at least filling out an application. “These packages can range from free gifts, called “swag,” to offers of low initial interest rates. According to a study released by the U. S.
Public Interest Research Group 76% of students received Frisbees, candy, pizza, and even IPods to fill out a credit card application. ” USA Today (04/04/2008) Credit cards go after college students. At an age when instant gratification can eclipse common sense, these tactics can be very successful. Credit card companies know this, in fact; invest time and money into researching their consumer targets. They also know where their efforts will yield a long-term commitment and college campuses offer a concentrated and receptive audience.The students receive their free gifts, a credit card and access to cash instantly, along with a high interest rate that was not explained to them.
” 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. ” Bloomberg News (05/08/2009) http://www. bloomberg. com/apps/news? id=newsarchive&sid=ajVskGdVyPSw Fortunately, some of these practices have received the attention of lawmakers recently and as a result, obvious dangers have been exposed so that students are better educated and can make more informed decisions impacting their long-term financial stability.
Title III – Protection of Young Consumers Section 301 – “Amends TILA to prohibit extensions of credit to consumers under age 21, unless the consumer has submitted a written application that meets specified requirements.Requires any such application to be signed by a cosigner, including the parent, legal guardian, spouse, or any other individual who has attained the age of 21 having a means to repay debts incurred by the consumer in connection with the account. ” http://www. govtrack. us/congress/bill.
xpd? bill=h111-627 The students who have proven to be responsible with their credit cards usually did not attain them at a campus where they were given gifts just to sign up, rather through a bank or their parents where financial direction was present.College students, today more than ever, are becoming more aware of and paying more attention to the consequences long-term debt through student loans and fees. According to the College Board, tuition and fees in the past 10 years have climbed 50% at public colleges to an average of $6,585 a year. With credit cards so easily attainable for students, due to the marketing on campuses, educational expenses such as books and other supplies are getting charged to the cards. An average of $2,200 in these types of expenses were charged in 2008, which is up 134% from four years earlier. The higher the grade level, the greater the card debt, according to Sallie Mae.
In 2008, college seniors with at least one credit card graduated with an average of $4,138 in card debt, up 44% from 2004. By comparison, freshmen’s average credit card debt jumped 27% to $2,038. ” USA Today (04/13/2009) http://www. usatoday. com/money/perfi/credit/2009-04-12-college-credit-card-debt_N. htm? csp=obinsite In today’s society and market, credit ratings can make or break a person’s financial stability.
With the advancing technology enabling purchasing of merchandise over the phone and on the Internet, credit cards have become essential to our way of life. With credit card ownership comes the enormous and challenging responsibility to live within one’s means. Even though as young adults, college students need to build their credit scores for the future, and credit cards can be beneficial toward this goal, statistics show most students are just not responsible concerning their own finances.College students do not yet possess the maturity or have enough life experience to enter such a long-term financial agreement, especially with no credit history. An increasing number of young adults will graduate with enormous debt in tuition fees alone. Thankfully, laws have been passed to address and prevent credit card companies from preying on students on campus by using promises and gifts in exchange for filling out an application for a credit card.
By adding credit card use to already stressful educational concerns, instead of enjoying the excitement of beginning new careers and the promise of financial stability, students are instead facing a future of insurmountable credit card debt and resulting bad credit scores. The uncertainty of today’s economy presents its own set of challenges to those just entering the workforce without the added anxiety of debt that will impact and follow them throughout the major milestones of their financial futures.REFERENCES Kathy Chu. (04/04/2008). Credit cards go after college students. Retrieved from http://www.
usatoday. com/money/perfi/college/2008-03-30-credit-cards-college_N. htm Kathy Chu. (04/13/2009). Average college credit card debt rises with fees, tuition. http://www.
usatoday. com/money/perfi/credit/2009-04-12-college-credit-card-debt_N. htm? csp=obinsite Alexis Leondis. (05/08/2009). Students become prey for cards charging 18%