« Dia Uno | Home | Orangeburg County SO LODD »

So…Charge it?

By Chris | May 2, 2008

My term paper is not writing itself. “Ethics in Credit Card Marketing to College Students.” Good topic, yet much of the data is repeated in numerous articles and publications. A group releases a study, and the media over-publicizes it…why? Because it’s sensational and it’s an ethical issue.

You have college students, and you have credit. College students are stereotypically ‘poor’ (aka, unwealthy). What do you do when you don’t have money? Charge it! Credit cards see this market and determine that it’s worth the risk of extending credit to students who have no money. WTF? Why would they do this? Simple - they found a large percentage of kids keep their first card after graduation, even if they have a stupid amount of debt.

Why on earth would a college kid get a card if they had no income to pay it? Simple: they have no income, and they do not know any better. The credit card companies certainly do not do anything above and beyond the minimum requirements as it pertains to notification of the terms (the tiny-assed print on all those pamphlets, etc). And how they get the kids to apply for the cards also draws fire. Direct mail is the most prevalent and most successful marketing tool that credit card companies can use. They obtain the addresses (and phone and email) of students simply by either requesting it (public universities are often compelled to release such information upon request due to state public records laws (think: FOIA)), buying it, or working some sweetheart deal with an affiliated entity (alumni associations, athletic associations, etc).

So, you have the shady marketing that get the cards to the kids, the gimmicks (freebies, etc) that get them to apply, and then you have, of course, the raping of the kids with the interest rates (think: double digit upper 20’s default rate) when they can’t pay (remember…no money!). Lest we forget overlimit fees, etc (which is what did my brother in when he was starting at Kutztown University).  These students who poorly manage their credit during school can graduate (if they don’t drop out b/c they can no longer afford it) with a stupid amount of debt that follows them.

For what it’s worth - many institutions have banned or curtailed the amount of on-campus marketing, however marketers find ways around it (of course).

Well, that was a strange blog post.  Oddly enough, it motivates me to get back into the paper since I felt this mind dump generated some more points.

And in other news - I’m supposed to go meet someone who seems amazing on Tuesday.  So…we shall see.

Topics: General |

2 Responses to “So…Charge it?”

  1. SarahLHolahan Says:
    May 3rd, 2008 at 0236

    Let me just say that your brother isn’t the only one who got suckered in at Kutztown. I have 4 cards from the time I was there. All have been defaulted on and are still on my credit report, 10+ years later. Kutztown actually let these companies set up in the Student Union building outside of the cafeteria and book store, giving out calculators and such. I know it’s my own fault for signing up in the first place and then getting in over my head. But, it is irresistable when that card comes in the mail and you have no $ for books or car repairs. It’s certainly better (at the time) than calling home and begging. Kudos to you for researching this subject. It hits home for a tremendous amount of people.

  2. Heather Says:
    May 3rd, 2008 at 0630

    One thing… frugal doesn’t mean broke. Frugal means you pay attention to where your money goes, wealthy individuals can be frugal. Heck, it’s how some of them got there in the first place.
    Oh and as far as the default rate, try 32%. A few years ago a payment slipped through the cracks on my card. With that notice, we closed it. Lastly pay attention to those “new offers” you may be receiving, occasionally they are simply announcements of rate hikes that you can opt out of, but most people assume it’s simply a new offer.
    It’s dirty pool.

Comments

You must be logged in to post a comment.