1998, credit card companies are expected to mail over 3 billion
credit card solicitations to consumers. These have been
pre-approved pitches promise a dream of low-cost credit, even
though most consumers who take the bait, and then manage to
qualify, are switched to higher-cost cards within 3 months after
the teaser rate expires.
the direct mail avalanche, even at levels guaranteed to destroy
entire forests, isn't enough to reach one of this extremely
profitable industry's key targets: college students. Despite their
lack of existing credit (and their lack of income, generally a key
criterion for other potential customers) the industry, attracting
by their lifetime profit potential, wants college students.
marketing doesn't work because college students don't have much
credit built up already, which means they don't have credit
reports. The industry uses consumer credit reports to derive the
pre-screened ("you've been pre-approved") mail and phone
call lists that it generally relies on to recruit new customers.
instead of cutting down trees and burning up the phone lines to
reach college students, the credit card industry goes hunting
right on campus. At tables outside the bookstores and student
centers, alongside the student volunteers recruiting new members
or raising money for charity, paid credit card company
representatives eagerly make their "buy now, pay later"
pitches while they hand out small bags of junk and freebies, candy
and soda (2-liter bottles!) to students, hoping to entice them to
fill out credit card applications.
administrators are concerned. Some colleges have banned the
practice. Others have ratcheted up credit education programs.
Student credit card debt is increasing and the students who cannot
pay end up in the credit card trap.
the spring of 1998, PIRG student volunteers surveyed 1260 students
at 15 representative campuses around the country to obtain
information about student credit card practices. This report
summarizes the results of that study.
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Credit Cards can get a student in a lot of Trouble.
College Students are not ready for Credit Cards