College students continue to be a key group targeted by credit card companies.

Why students are targeted

Diane Docking, associate professor of finance, believes college students are targeted for two main reasons: to establish a long-term relationship and because they are easy prey.

“If the credit card companies can establish a relationship with a student now, hopefully, they will still have one when the student graduates, has a job and needs additional credit,” Docking said.
Labeling students as easy prey means one of many things.

“A lot of college students are uneducated in the management of their finances,” Docking said, adding many students have never had a job, checking or savings account or lived on a budget.

“Credit card companies know this,” she said.

By targeting uneducated students, credit card companies have the opportunity to maximize their profits.

“That’s why the credit card industry vigorously markets to college students as valuable new customers,” said Brian Imus, state director of the Illinois Public Interest Research Group. “Students are subject to credit card rip-offs as they rely more and more on credit to pay for college.”

How students are targeted

The U.S. Public Interest Group (PIRG) conducted a study in March 2008 on college students and credit card marketing.

“We wanted to better understand the experience students have in dealing with the marketing practices of credit card companies,” Imus said.

The study reported that the credit card industry sends over 6 billion credit card offers through the mail to consumers each year.

“Many credit card companies send me offers in the mail,” said junior communications major Dani Grote.

Students reported nearly five mailed solicitations per month while 22 percent reported receiving an average of nearly four phone calls from credit card companies per month.

A common method of marketing used by credit card companies is the use of free gifts.

“They use trinkets, teasers and tricks to lure students to apply for credit, catching students in bad deals that pile on the debt,” Imus said.

Thirty-one percent of the students in the study reported being offered/accepting a free gift from a credit card company. The most common gift offered was a T-shirt.

The survey also came to the conclusion that credit card companies may be escalating their use of mail and phone channels in response to the growing restrictions on the use of on-campus tables.

NIU’s policy on credit card marketing

Even though NIU has no specific policy on credit card marketing, they do have policies on commercial activity.

“Policy in general is to discourage commercial activity within the buildings,” said Mitch Kielb, director of the Holmes Student Center.

If a credit card company were to market to students on campus, it would have to be through a recognized organization or department.

“There is nothing prohibiting a student organization from hosting a credit card company,” said Angela Dreessen, director of student involvement and leadership development (SILD). “It is not encouraged, but there is no policy stopping it from happening.”

The policy goes for more than just credit card companies.

“No credit card company can come here and get their own space,” Dreesen said.

Even if an organization were to try and bring in some form of commercial activity, they would still have to follow certain policies listed on the SILD Web site.

Kielb said they have had bad experiences with them in the past, which may be why NIU tries to discourage the commercial activity from taking place.

“Maybe it’s a problem on other campuses but you don’t see it here,” he said.

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