College students and campuses are off limits to marketing campaigns by charge card corporations due to the CARD Act, which restricted marketing to some groups. However, credit card companies are exploiting loopholes and many students are still signing up for credit cards.
Credit cards on campuses not ending yet
All unethical practices done by credit card corporations were supposed to be stopped by the Credit card Accountability, Responsibility and Disclosure Act. One of the provisions of the CARD Act was to prohibit charge card businesses and card issuing institutions from marketing heavily to college students, however they’re finding ways back onto campus, according to a recent article in the Wall Street Journal. The law prohibits any free promotional gifts to students, but that does not prevent card issuers from offering other things like the $50 bonus for signing up for a card, as Citibank does. Anyone who friended the Chase Facebook group can get “karma” reward points while Facebook is being used by Chase to market to students.
No laws broken
Charge cards are typically not coming from charge card or finance businesses. They are offered by banks instead. Banks are still allowed to hand out promotional literature for checking and savings accounts, just not credit cards. However, several people see that as a canard. A University of Houston Law Center found in a survey of college students that 73 percent of credit card marketing was not on campus at all which is why financial service companies are on the same level. That survey found out that 29 percent of students applying for credit cards used loans as proof of income to get the charge card showing that students are skipping the rules to get credit cards.
The price of an education
Yearly the cost of going to a university is going up. This is why students may want a charge card to try and experience something nicer like a real meal. The debt from college is going up. Students are taking out more. The Sallie Mae foundation found that 92 percent of college students in 2009 charged an educational expense such as tuition or books and 20 percent of college seniors carried at least $7,000 in credit card debt, according to U.S. News and World Report. The class of 2011, according to Time, carries the highest average college debt ever seen. A $22,900 average debt is carried by the class of 2011. That is an 8 percent increase from 2010’s graduating class. It is a 47 percent increase from 2001 too.
Information from
Wall Street Journal
online.wsj.com/article/SB10001424052748704322804576303652621312770.html?mod=WSJ_PersonalFinance_FamilyFinance#articleTabs%3Darticle
Time
newsfeed.time.com/2011/05/11/congratulations-class-of-2011-youre-the-most-indebted-graduates-ever/
U.S. News
usnews.com/education/blogs/student-loan-ranger/2011/05/11/student-credit-card-use-could-cause-problems-later
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