Characteristics of Campus Fair Cards
White Paper, April 2008 Executive
Summary
In March, the U.S. PIRG Education Fund released The Campus Credit Card Trap,[i]
reporting the findings of a major survey of student attitudes toward the
marketing of credit cards on college campuses. It analyzed how students pay for
their education, how many use and how they use their credit cards and, finally,
their attitudes toward credit card marketing on campus and whether or not they
support principles to rein in credit card marketing on campus. That report
documented that while many young consumers manage their credit cards well,
others do not. The report found that many students face difficulty paying their
credit card bills, and that a significant number have paid late or
over-the-limit fees or even had a delinquent card closed by the lender. The
study also detailed a number of investigations by state Attorneys
General[ii] and
newspapers[iii] into
credit card practices on campus.
Young people, including traditionally-aged college students,
have certain financial characteristics that make them different from other adult
targets of the credit card industry. This follow-up paper outlines the
recommended characteristics (terms and conditions) that credit cards marketed to
college students should have to be considered “fair” to college students and
other young people. Such fair cards should also be marketed subject to all of
the PIRG marketing principles and be accompanied by independent financial
education and literacy programs.
[ii]
Inquiry Into Bank Practices.” By Jonathan Glater, the New York Times, 1 March 2008,
explains New York Attorney General Andrew Cuomo’s nationwide inquiry into
exclusive credit card marketing arrangements on college campuses. In March 2008,
Ohio Attorney General Marc Dann settled a lawsuit with Potbelly Sandwich Works
for offering “free” sandwiches, conditioned on completing Citibank credit card
applications at shops near campus. Citibank remains a defendant. News release,
10 March, 2008, “Attorney General Announces Agreement with Potbelly,” Office of
Ohio Attorney General Marc Dann.
[iii] The
PIRG Campus Credit Card Trap analyzes the results of a Des Moines Register
investigative report highlighting relationships between Iowa’s major public
universities and Bank of America. See “U of I, UNI refuse Regents' request on
credit cards,” Clark Kaufmann, the Des Moines Register, 7 October 2007,
available at http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20071007/NEWS10/710070332 (last visited 18 March 2008), also see sidebar).
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