Farewell to Free Pizza and Credit Card Debt

Perhaps its time to be more selective about which credit cards we use.

For all of our college years, the banks and credit card companies have been right on (or right next to) campus, trying to get us to sign up.

But they are not all the same. Some of them seem to respect students and simply want to solicit our business. Others use far shadier tactics to hook us in.

California assemblymember Joe Coto has introduced Assembly Bill 262, the College Student Credit Protection Act, to address these most aggressive student credit card marketing tactics.

Ever get a free pizza or T-shirt to sign up for a high-interest credit card, and that “free” gift ended up costing you thousands of dollars? AB 262 would prohibit credit card companies from offering gifts to students who fill out credit card applications.

The bill would also require each campus to disclose all exclusive arrangements they have with the companies to market credit cards on campus. And for those students in the University of California, the bill would revise a 2004 UC-wide policy to cover more banks. Not unexpectedly, the worst banks and the California Bankers Association—the bank’s powerful lobbying arm—went to work in Sacramento as soon as they learned of the bill.

The banks really have nothing to fear. Student should have access to credit, and nothing in this bill would prevent the banks from signing us up. They will still reap enormous profits.

But just as they’ve been required to stop predatory lending to the poor and people of color, banks will no longer be able to use shady marketing tactics to target students.

In fact, this could be a win-win for the banks. Students will be more likely to use credit cards from companies that respect them.

More than 75 percent of college students have credit cards, and more than

40 percent of students have at least four credit cards. Student credit card debt increases significantly over college years; on average, seniors owe nearly double the amount owed by freshmen in credit card debt.

As financially strapped students we often talk about the burdens of student loan debt. But we know lots of students who will graduate with even more credit card debt than student loans. This will determine their financial stability, the career paths they choose and whether they can remain in this expensive state.

Too many California college students, of all incomes and backgrounds, are graduating into severe credit card debt. We should support AB 262 and, in the meantime, we should think a little more carefully about which credit card companies deserve our business.

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