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Central Florida Future: Credit card companies target students

November 12, 2008

AFFIL appeared in this article by Sebastian Church on November 12, 2008

The college life is not at all modest in its financial burdens. Tuition. Books. Rent. From these sharp expenses to the everyday fiscal demands of nutrition and personal hygiene, Joe Sixpack of Collegetown, America, is in dire need of financial resources.

“Young students, when they start college, do not have a lot of experience managing money, and so the credit card companies take advantage of their inexperience,” said Sarah Byrnes, the campaign manager of Americans for Fairness in Lending.
According to the Boston College graduate, credit card companies use a predatory business model to lure consumers. College students happen to constitute a large portion of this consumer base.

Credit card companies employ “affinity marketing,” a strategy that makes the company seem affiliated with particular schools and organizations. One way card issuers accomplish this strategy is by printing a logo on their customer’s card, say UCF’s Pegasus emblem, thus attracting UCF students.

AFFIL’s main goal is “to establish fair credit policies and practices.” As a collective of several different nonprofit groups, AFFIL works with numerous partners and allies to push legislation through Congress.

So far, the House of Representatives has passed a bill with basic protections called “Credit Card Holders’ Bill of Rights.”

In the Senate, Bank Committee Chairman Christopher Dodd has generated support for his provision “The Credit Card Accountability, Responsibility and Disclosure Act,” known as CARD Act. Both of these legislations are on the contemporary battlefront for protections against the seemingly unjust actions of credit card companies.

“We do see legislation as a short-term fix,” Byrnes said. But as for long-term solutions she said that college affordability needs serious improvement to keep students from having to take out private loans and cards to pay bills.

Statistics from the AFFIL Web site indicate that credit card companies solicit college students “several times a week on campus through flyers, online advertising and on-campus marketers.” By using giveaway items as bait, card issuers hook students; the site reports “71 percent of young adult cardholders do not pay off their balance in full each month. College seniors are graduating with an average of nearly $4,000 in credit card debt.”

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