Students and Credit Cards
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by: barrywaters
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Word Count: 428
College campuses offer a lucrative venue for companies marketing credit cards. Walk on any campus and you will see representatives from various companies giving away shirts, mugs and applications for credit cards. Students are an easy sell. Most are experiencing the sense of being independent like never before in their lives. The idea of having credit cards in their name can seem like the ticket to financial freedom.
Banks have a tradition on many campuses. Bank of America and Michigan State University, for example, have a multi million dollar contract that gives the bank access to the names of students currently enrolled. The university gets a kick back for students who open credit cards with the company. Contracts like these often offer universities even more money, if their students carry balances on those credit cards. Although these contracts benefit both the university and the credit card company, they have the potential to exploit young people who many not know the consequences of poor spending decisions. Recently, student organizations have been speaking out against the aggressive marketing practices that could harm students in the long run. The relationship between banks and universities also came under a microscope when hearings were held on Capitol Hill last June to scrutinize campus marketing practices.
Credit card companies claim they are acting in good faith and helping students learn to become responsible consumers. When students have credit cards of their own, they are laying the building blocks for their credit report and learning how relationships with banks work. Banks offer seminars on responsible spending, budgeting and paying off balances on credit cards. Additionally, they say the credit cards offered to students have lower limits and more restrictions than those marketed to graduates. Students on many campuses can sometimes even choose between having debit cards or credit cards. Universities claim their relationships with banks violate no laws and bring in resources that are used for valuable programs and scholarships. Even so, many have taken steps to limit access to student information when they enter into new contracts with banks.
Like everyone else, students are feeling the affects of the economic downturn. Some may open credit cards to help with expenses. The presence of banks on campuses will remain a part of college life, but it appears that it will be a less exploitive presence than it has historically been. Hopefully students are learning valuable lessons from the credit crises and will approach credit card solicitations with a discerning eye.
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