Students’ credit card debt can double in the years before graduation, a recent report claims — a revelation that has some charging credit card companies with deceptive marketing principles.
The study “Campus Credit Card Trap,” released March 27 by the United States Public Interest Research Group, surveyed more than 1,500 college students from 40 colleges and 14 states about credit card practices and marketing on college campuses. The report follows on-going investigations in Ohio concerning credit card marketing on college campuses.
Students average $1,301 in debt as freshmen and $2,623 as seniors, the study found, with four out of five students saying credit card companies should adopt stronger marketing principles on college campuses.
About three-fourths of students had stopped at marketing tables awarding “free” gifts like Frisbees and iPod shuffles for filling out an application.
Ohio Attorney General Marc Dann filed suit against Citibank, Elite Marketing and Potbelly Sandwich Works in September for “unfair and deceptive” practices. Posters throughout Ohio State University’s campus said “Free Food” with little indication that students would be required to complete a credit card application to get their “free” sandwich.
“If the credit card industry continues to exploit young consumers, we will continue to file more lawsuits . . . to stop lenders from luring vulnerable college students into a debt trap with high rate, high fee credit cards,” Dunn said in the survey’s press release.
“Students are entitled to have credit cards, but universities should not be facilitating companies that deceive students,” said U.S.PIRG consumer advocate Ed Mierzwinski.
Mierzwinski said campuses need more financial literacy classes for students.
Some campuses have counter-credit marketing programs run by U.S. PIRG called “FEESA.” Students dressed like credit card marketers give out information about fair credit practices and “you are not a sucker” lollipops instead of free food or T-shirts, Mierzwinski said.
Mierzwinski said Boston University does not have a MassPIRG group because of a long history of disagreements with the university.
Boston University freshman Kay Fragomeni said she has a credit card to build her credit rating and does not see why credit card marketing should be made stricter.
“If you got into college, you have some brains,” she said. “Obviously it is a scam. I don’t see how people could fall for it.”
Boston University sophomore Jaimie Collum said she thinks college students gain positively from having a credit card and said she has only one credit card despite a few free T-shirts.
“Credit cards can teach you responsibility and make you more independent.” Collum said.