Student Credit Cards
Overview: Student Credit Cards
compiled by Sam Donaldson
Many of the various credit card issuers these days have rapidly embraced the concept of seeking to issue credit cards to college students. After all, these are tomorrow's elite, and it would make sense to focus on providing these people with superior credit related products. It is simply looked at as a long term investment by many of the credit card issuers.
According to a recent government study:
"Now the Universities’ policies and practices regarding credit cards do tend to vary—in particular regarding solicitation—varied not only across universities, but also within the universities themselves. We found that policies were either campus wide (all parts of the university were subject to one set of rules) or allowed individual entities, such as bookstores, student unions, and alumni associations, to set their own rules. Of the 12 universities and colleges we visited, 2 state universities had relatively restrictive policies based on state law; and one private university prohibited credit card solicitation. Nine institutions had decentralized policies. On these campuses, for example, a student union might restrict solicitation, while a bookstore might not. In some cases, complaints from students about aggressive marketing had led the universities to adopt policies restricting on-campus marketing. Both university officials and students cited the personal solicitation of college students on campuses as causing the most controversy. One official pointed to the “carnival atmosphere” marketers created and many raised concerns about aggressive sales practices. Card issuers paid credit card vendors by completed application. Several major credit card issuers made an effort to address this problem by adopting a “code of conduct” for contractors that solicit on campuses. All but two of the universities had made efforts to educate students about handling their finances, including offering informal “financial education” presentations ,debt counseling, and on-line information. Two universities made bankruptcy attorneys available to counsel students who were having financial difficulties. One attorney told us that about one in five students who used the legal service over the past 3 years sought advice or information on credit card debt issues. Few of the universities we visited."
With this being said, it is obvious that students must be weary and careful of not only over-extending themselves credit wise but also to be weary of marketing gimmicks on campus and the like. In short, it likely is not best to make snap decisions in matters concerning student credit cards.
For concerned parents of young folks about to attend college, I have received permission from the folks at the Department of Financial Institutions with the State of California to reprint information on the following self-help program that I highly recommend.
THE ABCs OF CREDIT CARD FINANCE
2007
A Credit Card Literacy Program for High School Juniors & Seniors
Once again, the Department of Financial Institutions (DFI) will partner
with The Center for Student Credit Card Education, Inc. (CSCCE) and
offer free credit card literacy program for high school juniors and
seniors.
The program teaches students how to wisely choose and responsibly use a
credit card before they move on to college or join the workforce.
Citibank, for the fourth year, is making the program available through a
non-commercial, educational sponsorship. To stay current with the credit
card industry, the curriculum is revised yearly. This year’s changes
include new payoff tables and the latest terminology.
Over the past three years, more than 1,000,000 (one million) students,
in all fifty states, have participated in “The ABCs of Credit Card
Finance.” By teaching this program, you will help students develop the
credit card literacy skills necessary to build a positive credit history
that will serve them today and for years to come. The course materials
include:
1. A primer, The ABCs of Credit Card Finance – Essential Facts for
Students (attached
in pdf format). One primer is provided for each participating
student.
2. A supporting Trainer’s Guide and PowerPoint Presentation, which
facilitate teaching the program. One Trainer’s Guide will be provided to
each school. In addition, the PowerPoint Presentation and extra copies
of the Trainer’s Guide can be downloaded at
www.Students.UseCreditWisely.com.
The program takes approximately one hour of instruction time, not
including the optional tests and classroom activities. Since most
students will not self-educate on this topic, it is a requirement that
the curriculum be taught.
To take part in this program, simply respond email Alana Golden at
CFLM@dfi.ca.gov and providing
us with the number of students you will be teaching and the mailing
address to which we should send the materials.
I have also below compiled a report that was presented to Congress from the General Accounting Office below that is concerning Student Credit Cards. It makes a very interesting read. This information is public domain, therefore free to print and distribute if desired:
College Students and
Credit Cards