Bill limits credit-card marketing on campus
Washington State University student Brea Thompson got her first credit card shortly before she left home for her freshman year. She used her new...
The Associated Press
OLYMPIA — Washington State University student Brea Thompson got her first credit card shortly before she left home for her freshman year.
She used her new plastic to purchase everything from books and dorm-room decorations to food and clothes. Now a senior, Thompson said she spent thousands of dollars on various cards before realizing she was digging herself into a hole of debt.
"The thing that most students don't think about when they are spending money on an intangible object is that they're not going to reap the benefits years later when they're paying off something like a pizza," said Thompson, who is now WSU's student-body president.
For college students tired of cheap beer and ramen noodles, credit cards can offer a seemingly easy road to a life of plenty. Throw in the gifts and perks offered by credit-card companies and getting a card can be almost irresistible.
But not so fast, say a few Washington lawmakers.
The state House is considering a bill that would restrict the marketing of credit cards to college students on the state's public-school campuses. The Senate already approved it.
The days of needing a job or an income to get a credit card are long gone.
Credit strategies for students
Here are tips to help students keep their credit under control:
Read all the application materials, especially the fine print. Check to see what happens after the advertised interest rate expires and when a payment is late.
Consider using a debit card, which deducts money directly from a checking account, instead of a credit card.
Use credit only if you know you can repay the debt.
Avoid impulse shopping on your credit card.
Save your credit card for a money emergency.
Pay bills promptly to keep finance charges and other fees to a minimum.
Credit-card companies recognize that most unemployed college students will find a job after graduation — and there's the few whose parents will foot their bills, said Marie O'Malley, the vice president of marketing for Nellie Mae, the student-loan organization.
"It is easier now," O'Malley said. "[The credit-card companies] have made policies that say students that go to college are good credit risks."
More than 80 percent of college students have at least one credit card, according to a 2001 survey done by Nellie Mae.
The majority of college students with credit cards pay their bills on time, according to a 2004 report in the Journal of Student Financial Aid.
Students who received their cards through student-marketing programs actually had lower credit limits and smaller balances than other cardholders their age. As a group, though, students are still more likely than older adults to pay late and exceed their credit limit.
In Olympia, student lobbyists say that, whether fiscally responsible or financially challenged, students are tired of being targeted by credit-card marketers.
The marketers are particularly prevalent at Washington State University in Pullman. It's common to see credit-card companies offering students free T-shirts or sunglasses, said James Evans, the school's student lobbyist.
"It takes advantage of a youthful financial ignorance," Evans said. "A lot of these students haven't learned how to properly manage their credit, and they don't see it for what it really is — they see free money."
The bill would require public colleges and universities to create policies regarding credit-card companies on campuses.
As part of the policies, the schools could ask the companies to register with them, limit the times and places they could market the cards and even prohibit the gifts companies offer to students.
Most schools already had some policies in place regarding commercial vendors selling things on campus, Evans said. Enforcing them is the difficulty.
The bill doesn't suggest any consequence for credit-card companies not following the campus policies — or for campuses not enforcing their rules — but Evans said it's a good start.
"We essentially believe this is a message from the Legislature that this needs to happen," Evans said. "If campuses aren't interested in what they have to say, then I suppose we'll be back next session."
Washington State University does have a policy prohibiting credit-card companies from campus, said Kelly Brantner, the university's director of marketing for campus involvement. She's escorted one company off campus this year.
"If they were here other times, then I didn't know they were here," Brantner said.
The University of Washington doesn't allow any commercial vendors on its campus. The problem is on Greek Row, where credit companies entice students with free pizza and candy, said the UW student lobbyist Jamie Corning.
"We've got the problem, but here it's beyond the university's ability to regulate it," Corning said.
Ed Murphy, a spokesman for nationwide credit-card company MBNA, said marketers for the firm are responsible when it comes to students.
"We've found students use cards the way most people do, which is responsibly," he said. "If anything, students have become more educated over the years about credit."