Protect Students From Credit Card Marketing
Assemblywoman Audrey I. Pheffer has announced that a law she supported to protect college students from the financial ruin that often results from the overaggressive credit card marketing will take effect July 1, 2005 (Ch. 694 of 2004).
“Upon graduation many college students have to begin paying off student loans which alone are a financial burden. Heavy credit card debt on top of that can be a financial nightmare for young people,” said Assemblywoman Pheffer. “This law will help college students think twice about spending money they do not have.”
Credit card companies are aggressively targeting college students and the results have been less than positive. A recently published report, by Claritas Incorporated, found the average balance due on a college student’s credit card had gone up 134 percent – from $900 in 1990 to $2,100 in 1995. As a result of high credit card balances, many college students are forced to file for bankruptcy. Some colleges have contributed to the problem by accepting a percentage of money in exchange for helping companies merchandise credit cards.
“Our students go to college to get ahead in life, not to start down the road to bankruptcy. Colleges should teach the minds of society’s future to manage finances responsibly, not lead them astray, “said Assemblywoman Pheffer.
This law will help alleviate the danger of a student taking on too much debt. As a means to protecting college students from credit card debt, the law prohibits marketing credit cards on college campuses unless the college adopts “an official credit card marketing policy” that includes:
Registering of on-campus credit card marketers;
Limiting credit card marketers to specific dates and specific areas of the campus as designated by the college;
Prohibiting credit card marketers from offering gifts to a student in exchange for completing a credit card application; and Informing students about good credit management practices through programs that may include workshops, seminars, discussion groups, and film presentations.
“Teaching students about the benefits of establishing good credit will help them develop into responsible adults. They will learn early how to establish good credit, become financially secure and one day be able to successfully apply for a loan on a house, car or even a business,” said Assemblywoman Pheffer.