SARAH Comtois, a senior at the University of Toledo, recalls arriving on campus as a freshman and getting her first taste of adulthood: a credit card.
It was pretty easy to get, said the 23-year-old communications major from Westlake, Ohio, near Cleveland. She also got a UT Rocket Card a debit card good for expenditures on campus but, she said, I couldn t go shopping at the mall with that.
The credit card was great for buying clothing and just going out nothing responsible, Ms. Comtois said.
That attitude is music to the ears of credit-card companies, who swarm college campuses and their fringes armed with gifts, food, financial advice, and often money for the schools or their alumni associations, in an effort to sign up new (and soon to be wage-earning) customers.
The industry looks at students as a type of Holy Grail because if they can get their card to be the first card in someone s wallet, they may keep it for a very long time, said Ed Mierz-winski, program director of the U.S. PIRG Education Fund, a consumer advocacy group which last week announced a campaign to persuade more colleges to crack down on credit-card marketing to students.
About 15 states restrict or ban credit-card marketing to students on campus, but neither Ohio nor Michigan is among them. Both states let their colleges and universities decide how to handle the situation.
We are more concerned with how these companies are marketing to students and are they doing it deceptively, said Michelle Gatchell, a spokesman for Ohio Attorney General Marc Dann. Michigan takes the same attitude, said Matt Frendewey, a spokesman for Michigan Attorney General Mike Cox.
Mr. Dann s office recently teamed with lawyers from Ohio State University s Moritz College of Law to sue Citibank for deceptive practices. The suit alleged that the bank and a local restaurant lured students off campus with promises of free food and drink, provided after students filled out credit card applications.
Creola Johnson, a law professor at Ohio State, has studied card marketing to students, and said without laws that ban or restrict marketers, states must aggressively guard against deceptive practices.
If you think about it, when we think of victims of predatory practices people don t normally think of college students because they think of them as being rich in comparison to most people who run into financial difficulty, she said.
But I think the reason we don t hear more horror stories about college students is because their parents essentially bail the students out when they run into difficulty in most cases.
Ms. Johnson studied two student suicides in Oklahoma: Mitzi Pool, 18, who in 1997 amassed $2,500 in credit-card debt, and Sean Moyer, 22, who ran up $10,000 in credit-card debt. Both hanged themselves.
Those cases prompted Ms. Johnson in 2002 to survey 400 Ohio State students about how they would respond if overwhelmed by credit-card debt. Eight-two percent predicted stress and 75 percent depression. Thirty-four percent said they probably would use drugs or alcohol, and 27 percent said they would steal to get what they needed.
Nearly 22 percent said they would consider suicide.
The most recent national survey by Nellie Mae, a student loan firm, found that 76 percent of undergraduates had credit cards in 2004, down 8 percentage points from 2001. The average outstanding balance was $2,169, down 7 percent from 2001. More than half had carried balances of less than $1,000. However, by their final year, 91 percent had cards, and balances had risen to $2,864.
Robert Hammer, a credit card industry consultant, said that although students remain a priority for the industry, cooperation between schools and credit card marketers has lessened.
Twenty years ago the universities decided to allow it, and made money off fees the industry paid them, he said.
But recently, Mr. Hammer said, more schools have been asking, Do we want the student to be solicited on campus, in the dorm? It s up in the air how this will all shake out.
In Ohio and Michigan, how marketers reach students depends on the institution.
The University of Findlay in Ohio and Adrian College in Michigan ban all solicitation .
Suzanne Sullivan, a spokesman at Findlay, said, Last year our president got a report of a credit card company phoning students in their dorms. We contacted them and asked them to stop.
For years, though, credit card marketers have found easy routes around restrictions.
For example, Bowling Green State University bans solicitation on campus.
But as a public institution, If someone makes a public record request for student contact information, we are required to provide that unless the student doesn t want their information disclosed, said Kim McBroom, a BGSU spokesman.
And companies mine such data regularly.
Forty-two percent of students get their first credit card via direct mail, and the average student gets 25 to 50 credit card solicitations a semester, according to 2006 statistics by the United College Marketing Service, an Oak Brook, Ill., firm that runs financial education seminars with credit-card firms as sponsors.
I have two kids, and they get something in the mail every day from credit card companies. It s hideous, Ms. McBroom said.
Besides mailings, marketers also hold off-campus promotions in Bowling Green and offer free items to get students to attend and fill out applications.
Jackie Schroeder, 21, of Ottawa, Ohio, a BGSU senior and education major, said lines of students at restaurants, banks, or other locales in town in the fall are common sights.
You can get credit cards in five or 10 minutes here if you really want one, she said.
Some students on campuses fill out an application using false information just to get the T-shirt or food coupon as a gift, and know that the card won t be approved, experts said.
Ohio State and the University of Michigan in Ann Arbor ban all credit card marketers except one Bank of America. Both schools have exclusive deals with the bank, formerly known as MBNA, to supply affinity-branded cards through their alumni associations.
Access to information
Bank of America gives money to the alumni association and receives data on students and faculty that allow them to be solicited, usually by mail.
The approach, often secret, is how credit-card companies gain access to otherwise private databases on students, parents, and fans of a school s athletic teams. Recently, the Des Moines Register newspaper obtained public records showing that the University of Iowa alumni association was receiving $550,000 annually from Bank of America for access to data lists the association gets from the university.
This is why you won t see a lot of schools banning credit card companies. They re getting too much money from them, said Ms. Johnson, of Ohio State.
Betty Reiss, a Bank of America spokesman, said the company prefers affinity card arrangements to other forms of marketing.
Our primary channel for marketing for our cards is through our banking centers, because our objective is to obtain a long-term relationship with a customer, she said.
Chase Bank recently partnered with BicyTaxi, a firm that provides taxi service via small pedal-powered vehicles, on UM s Ann Arbor campus. Chase paid the cost of free cab rides to promote its +1 credit card by having drivers give riders applications while en route.
Mr. Hammer, the industry consultant, said that, although giving away T-shirts, iPods, food, and cab rides works, the marketplace is demanding card issuers provide financial education to reduce credit card abuse.
Ms. Comtois, the University of Toledo senior, said most students don t know about pitfalls. No one ever told me anything about interest rates and I didn t know a lot about fees, she said.
Demand for financial advice has prompted card issuers to co-sponsor financial literacy seminars at which they can hand out applications.
United College Marketing Service said it will hold 1,100 such programs on campuses this fall, with credit card firms sponsoring 70 percent of them.
Rather than ban credit card marketers, the University of Toledo lets them on campus, but makes them pay.
Companies are allowed to come and set up shop but only in the student union and we charge them $125 a day to do that, Jon Strunk, a UT spokesman, said.
That money goes to a fund to bring in financial experts and others to campuses to provide financial education to teach students how to keep their credit intact and avoid pitfalls.
Contact Jon Chavez at:firstname.lastname@example.org 419-724-6128.