Bill seeks accountability for credit card hawkers, colleges

By Thomas Pardee, Staff Reporter

Jody Warner

Colleges and universities are being urged by Illinois lawmakers and advocacy groups to take measures to protect students from predatory credit card pushers.

Illinois state treasurer Alexi Giannoulias visited several Chicago-area universities on Sept. 9 to announce a new campaign against credit card issuers. The campaign aims to regulate their marketing tactics, and preventing them from buying and selling students’ personal information.

Credit card vendors, known for tabling at school-wide events at colleges all over the country, are not allowed at Columbia, according to Kari Sommers, assistant dean of Student Life.

Kati Phillips, a spokesperson for Giannoulias, said the goal of the campaign isn’t to stop students from opening up credit cards, but rather to make credit card use and marketing more responsible.

“Credit card marketing is a hot topic nationally,” she said. “We want to make the marketing transparent. That’s really our goal, because it’s important for students to start a credit history.”

The objectives of Giannoulias’ campaign include banning issuers from using “freebies,” like T-shirts and coupons, to entice students and mandating that colleges and universities that allow vendors to market on campus also provide financial counseling that teaches how to use them. The organization produced a short online video parodying the MTV show Punk’d, entitled “You’ve been F#%’D,” which highlights some of the fine-print tricks some vendors use to hook students once they’ve taken the bait.

According to “The Campus Credit Card Trap,” a report released earlier this year by the student Public Interest Research Group (PIRG), more than 75 percent of college students report stopping at tables set up by credit card vendors to consider their offers. One-third of those students said they were offered or accepted a free gift for applying for a credit card.

Sarah Byrns, campaign manager of Americans for Fairness in Lending (AFFIL), a nonprofit consumer advocacy organization that’s working to spread the word about credit card hawkers, said the “trinkets for cards” approach to credit card issuing misleads students and doesn’t properly inform them of the commitment they’re making.

“A lot of kids think, ‘I’m just signing my name, what difference does it really make?'” Byrns said. “What many of them don’t realize is that their name is in the system forever, can be sold and likely will be. And if you are issued a card, you can get into debt that could last years.”

Treasurer Giannoulias’ bill, which Phillips said he hopes to submit to the state legislature in January, will also make it illegal for college affiliate organizations, like alumni associations, to sell students’ personal information. If passed, the bill would also make affiliate organizations’ marketing contracts accessible to the public.

Brooke Heidler, a junior public relations major at Columbia, said she’s been misled by flashy campaigns in the past.

When she was a freshman at the University of Cincinnati, Heidler was persuaded to open a credit card just for the free T-shirt the vendors offered her. She never intended to use it so she canceled the card immediately but then opened another, which she started using to build her credit.

After transferring to Columbia last fall, she opened an American Express “IN:CHICAGO” card, and when faced with more places and incentives to use it, her spending habits changed drastically.

“I went wild with my spending,” Heidler said. “I would think, ‘I don’t have cash in my wallet, but I have the card …’ It put no limit on my spending.”

Rewards programs, such as airline miles and cash-back points, put even more pressure on students to charge. Heidler said she used her card to cover everyday essentials as well as school-related costs, partially to benefit from the rewards points.

Jennifer Waters, executive director of Student Financial Services, said SFS doesn’t directly accept credit cards for tuition payments.

“When we saw who was using credit cards to pay tuition, we realized it was people who were going to pay out of pocket anyway but were just trying to get rewards,” Waters said. “We had to pay a fee for every transaction, so essentially we were subsidizing their rewards.”

Waters said although Columbia doesn’t have an official policy against on-campus hawking, the college doesn’t hold any contracts with credit card companies, especially those who request to market on campus. She said the banking tables that can sometimes be found at the SFS office aren’t issuing credit cards.

“Don’t mistake them for credit card vendors,” she said. “They’re setting up bank accounts, or telling students how to do so. They are not allowed to discuss credit cards, or private loan options, for that matter.”

Sommers said not allowing vendors on campus is part of the college’s commitment to students’ best interests.

“We don’t have a specific rule, but we have a philosophy,” she said. “It’s kind of a no brainer-people feel pretty strongly that we want to protect our students, it’s part of our role. We take that very seriously.”

Phillips said students can still be targeted off-campus via mail ads or street vendors. Some may hand out coupons for free food that’s only valid if students apply for a credit card at the restaurant.

Despite these traps, Phillips said students can effectively use credit cards to their advantage, but that they need to be vigilant.

“Read the tiny print, the part about your interest rates,” Phillips said. “Low interest rates don’t last forever. You need to understand what makes them go up. Keep them for emergencies and not for entertainment until you have an income that allows you to afford it.”

Heidler said she has since opened up another credit card but has stopped carrying or spending any of them. She’s working on pulling herself out of the hefty debt she’s accumulated by spending above her means, and that means leaving the card at home.

“I’m working, so I have a debit card and cash in the bank,” she said. “If I don’t have the funds, I don’t spend them. I’ve had to learn that.”

Phillips said while the bill Treasurer Giannoulias is championing may make it easier for students to avoid persuasive credit card hawkers, it wouldn’t be necessary if people knew when not to swipe.

“Avoiding impulse buys will help tremendously,” Phillips said. “We’re afraid that if you have easy credit cards laws and impulsive, needy students, you’re looking at a recipe for a world of hurt for a long, long time.