The Extra Credit Students Don't Need

Ed Mierzwinski is trying to get the word out to college students that the free T-shirt or teddy bear or sub sandwich they accept in exchange for signing up for a credit card could end up costing them a lot of financial heartache.

For years now, lenders have set up tables on college campuses offering free stuff to entice students into signing up for credit. The companies know that if they get these young people early, they are likely to capture customers for a long time.

Many schools have signed lucrative affinity deals with credit card companies in which they provide contact lists of students or allow sidewalk-marketing by the credit pushers. It's an insidious relationship. The schools justify the setup because they need the funds the card companies pay them for access to the students. And school officials and the companies insist that the cards help students build their credit histories.

What many students end up building is a lot of debt.

"They rely on the fact that students are vulnerable," said Mierzwinski, the consumer program director for U.S. Public Interest Research Group.

But now many college students will be seeing new tables on their campuses, marketing a different message. With a grant from the Ford Foundation, U.S. PIRG is heading a coalition that is staging a national campaign against credit card marketing. They are starting on 40 college campuses across the country. Instead of a credit card application, students will be handed literature warning them about the fees and terms of certain credit cards. They'll still get free items, including lollipops that say, "Don't be a sucker."

Of course every campaign has to have a slogan. In this case it's a play on Visa, "FEESA. Free Gifts Now. Huge Fees Later."

U.S. PIRG has been joined in this campaign by the American Council on Education; the National Association of College and University Business Officers; and NASPA, Student Affairs Administrators in Higher Education.

Consumer and higher education groups have become increasingly concerned that college students, many of whom do not have a job or steady income, are getting credit cards without fully understanding the credit terms.

In a 2004 study of credit card usage by undergraduates, 56 percent of freshmen reported that they had obtained their first card at the age of 18. The student loan lender Nellie Mae, which conducted the study, said that as students progress through school, their credit card usage swells.

By the time they reach their senior year, 56 percent of students carry four or more cards, with an average balance of $2,864. Of course, some have much more than that.

The counter-marketing campaign includes a Web site ( http://www.truthaboutcredit.org), planned publication of research reports on credit card marketing practices and an appeal to colleges to adopt the following: