New law to end credit card solicitation on campus

    A new state law protecting college students from predatory credit card companies will go into effect on July 1.

Assemblyman William Scarborough (D- St. Albans) was one of the sponsors of the law which will limit the advertising, marketing and merchandising of credit cards on college campuses.

“It has been a major headache,” Scarborough said. “The number of college students who have gotten [in]over their heads is unbelievable. It’s a phenomenon that is occurring all over.”

According to the legislation, credit card marketers will be able to solicit college students only if the college adopts an official marketing policy that limits marketers to specific dates and areas on campus, prohibits gifts for students who sign up and requires sponsorship of student education programs regarding good credit management.

“Our students go to college to get ahead in life, not to start down the road to bankruptcy,” Scarborough said. “Colleges should teach the minds of society’s future to manage finances responsibly, not lead them astray.”

There was no previous statute prohibiting or regulating the marketing and merchandising of credit cards on college campuses.

American Consumer Credit Counseling stated in their annual report that college students continue to succumb to credit card debt because of the industry’s aggressive marketing tactics.

According to a study conducted by Nellie Mae, a leading provider of student loans, credit card companies pursue college students because they are the least likely to pay off their monthly balance in full, thus providing the credit company with large finance charges.

Credit card companies employ targeted marketing tactics to solicit students, renting tables on campus, stuffing offers in textbooks and soliciting them through physical and electronic mail.

According to Jody Fisher, director of media relations for St. John’s University, no outside vendors, including credit card companies, are allowed to solicit on campus at any time.

“We encourage students to exercise caution,” Fisher said. “You want to be very careful with credit cards and all they entail. St. John’s has run seminars about identity theft through the Department of Public Safety for that reason.”

“We want our students to be smart consumers,” he added.

More than 80 percent of college undergraduates have at least one credit card and reported an average credit card balance of $2,327 in 2001. Graduate students surveyed in 2003 by Nellie Mae had an average credit card debt of $7,831 and an average of six credit cards each.

“Upon graduation many college students have to begin paying off student loans which are a major financial burden,” Scarborough, who attended Queens College, said. “This law will help college students think twice about spending money they do not have.”

Americans between 25-34 years old have the second-highest rate of bankruptcy, according to a report released in 2004 by Demos, a London-based research group.

Scarborough said he believes that teaching students about establishing good credit will help them develop into responsible adults.

“They will learn early how to establish good credit, become more financially secure and one day be able to successfully apply for a loan on a house, car or even business,” Scarborough said.