Why Credit Card Companies Target Students

One in four students leaves with more than $ 5,000 in debt, a Real you Credit study shows. One in 10 leaves with more than $ 10,000 in debt. If you’ve just graduated from college, your first real job, and trying to make it on your own, credit card debt is the last thing you have to worry about.

You will have to pay rent and utilities, possibly a car note, and student loans if you use them. That’s more than enough for a 20-something, just from college, to think about every month. Before you head off to campus this fall, make sure you understand some basic principles that will help you stay out of credit card debt.

Credit Card Companies Love Students

Credit Card Companies Love Students

Students are a credit card company prime prospect. (If you haven’t seen the documentary Maximum reached, watch it before you step foot on campus.) They like to get you in while you’re young for a few reasons. First, they have a strong sense that your parents will bail you out when you run up your credit card bill. Secondly, you have a long credit life ahead of you. That means many years of interest payments for the credit card companies.

In the past, credit card companies were so hungry for students, they approved applications even when the students did not meet the criteria. For example, a student may have a credit card with no job, no verifiable income, no credit history, and even without a co-signer. Recent changes in credit card law now require credit card companies to check the student’s income before giving them a credit card. Students without income must get a cosigner to qualify.

If you have a credit card company on campus, they probably have paid your college administrators a fee, sometimes millions of dollars, for being able to market credit cards for you. Colleges also receive a kickback from all credit card a percentage of the costs incurred and sometimes open. Credit card companies pay to sell credit cards to students because they bank on students who pay for it in interest charges and fees.

The marketing tactics of Credit Card Companies

Credit Card Companies

Credit card companies really understand the college demographic. You can use the marketing tactics that they use to trick young people into applying for new credit cards. These tactics mainly report to giving something away for “free.”

Expect to be representatives of credit card company at or near the campus handing out free stuff for credit card applications. The law prohibits them from giving away material items such as t-shirts or frisbees on campus, but the law does not prohibit intangible items such as a coupon for a free sandwich at a local restaurant or a credit statement on your new credit card.

And credit card companies can even give away tangible things, but at a location outside the campus. Free things are nice, but this is not the way to sign up for a credit card. Should you not be suspicious of a company that is bending the rules to try to give you a product? It is not just a free sandwich you get when you sign up for a credit card. Sign up for a ticket to the Broadway musical Debt, starring you. Whether you live or not, it’s up to you.

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credit loan

When you are ready for a credit card, don’t sign up for the first thing that comes your way. Instead, shop comparison of the way you would do for a new car. Look at a few different credit cards and choose the one that has the best deal. At a minimum, your credit card must not have an annual fee and a low interest rate. Tables and seats on and around the campus are one-way credit card companies trying to get students. Now they have started emailing students and asking for credit card sign-ups on Facebook.

Federal Law and Credit Cards for students

Credit Cards for students

Credit card companies are forbidden from giving credit cards to students and young adults younger than 21 who do not have a fixed income or a co-signer. However, the law does not specify what qualifies as income or what type of proof credit card companies must receive for credit cards.

The bottom line is that no matter how attractive the card or free gift may seem, you are better off looking for your own credit card. Use credit responsibly so you are not the one in four graduates with thousands in credit card debts.

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