- The Washington Times - Monday, September 3, 2001

Regina Smith, 20, a junior at Georgetown University, was throwing a flying disc on campus with her friends last spring when a young man asked if he could join in. After playing with the group for a while, the man asked the students if they would like to fill out applications for Citibank MasterCards, Ms. Smith says.

To be nice, Ms. Smith says, she filled out an application and later canceled the credit card. She had to sign "something about terms and conditions," but no educational pamphlets on how to have good credit accompanied her application, she says.

At the beginning of every school year, young-looking credit card marketers come out in full force on campus. Their advertisements seem to be everywhere, including the insides of bookstore bags, Ms. Smith says.

"They are always on campus and they never stop," says Crista Ziccardi, a 19-year-old junior at Georgetown University. "They make your life hell."

For some students, these marketing tactics are a nuisance. For many others, they are the first taste of commerce and years of struggle to pay down stubbornly high credit card bills.

"On one hand, they [credit card companies] are offering a service that can be very useful," says Stephen Brobeck, executive director of the Consumer Federation of America.

"On the other hand, they are offering a product that is potentially very dangerous. A significant minority of students get in trouble."

Problems arise for college students when they receive anywhere from five to 10 cards, their credit lines expand and they lack significant income. Some students actively encourage friends to obtain cards while many get cards on their own to buy clothes and pick up bar tabs, Mr. Brobeck says.

Marketers frequently hang out at Georgetown University's Red Square, a central location on campus, says Ms. Ziccardi, who has three credit cards. They come out in full force in the fall when freshmen arrive, but many marketers are active in the spring, she says.

Although many college students say they are accosted by credit card marketers on campus, credit card companies and local school officials deny that they allow this to happen on a large scale, if at all.

Georgetown University allows banks to come on campus only to discuss their "student services," says spokeswoman Julie Bataille.

That's fine with the companies, as long as they can slip a credit card application in students' hands, many of whom have no experience with credit and don't understand the concept.

Growing debt burden

Consistent misuse of credit cards by college students coupled with student loan repayments can lead to substantial debt burdens after graduation, says a report released on July 18 by the government's General Accounting Office (GAO).

About half of college graduates leave school with an average $19,400 owed in student loans in addition to credit card debts, the report says.

The GAO compiled the report at the request of Reps. Louise M. Slaughter, New York Democrat; John J. "Jimmy" Duncan Jr., Tennessee Republican; and Paul E. Kanjorski, Pennsylvania Democrat. The lawmakers were concerned about the growing problem of college credit card debt, says David D'Agostino, the GAO's director of financial markets and community investment.

Between 63 percent and 64 percent of college students have at least one credit card, and 58 percent to 59 percent of them report paying their balances in full every month, the report shows. Their results were based on unverified and potentially underreported information from students, the report says.

The average balance owed by students who do not pay their bills in full is $577. Between 14 percent and 16 percent of students interviewed reported balances exceeding $1,000, while 5 percent had balances of more than $3,000, the report says.

The number of people younger than 25 filing for bankruptcy increased 51 percent from 1991 to 1999, the report says.

The co-sponsors of the study want to amend the Consumer Credit Protection Act to limit the total amount of credit extended to students. The amendment, called the College Student Credit Card Protection Act, also would prohibit full-time college students without independent incomes from having more than one credit card.

Credit card companies are able to distance themselves from blatant marketing to students by farming out their cards to financial institutions that do the work for them. Sometimes those institutions also hire marketing contractors to peddle the cards on campus.

Bank of America has its own representatives who advertise the bank's entire student services package. However, it also relies on the contracting company Event Marketing Concepts Inc. to market just the bank's student credit cards on college campuses, a Bank of America spokesman says.

Event Marketing Concepts declined a request for an interview for this article. The company's Web site says its representatives manage credit card booths on college campuses and are compensated for all correctly completed applications they receive.

Applicants receive free gifts. Event marketers will merchandise products "with an eye-catching personalized banner and free gifts," the Web site advertises.

Hired guns

Ben James, a 25-year-old professional credit card marketer, says his company also is contracted by Bank of America to market its student credit cards. His company, Dominion Contract Group, could not be found by this paper. A Bank of America spokesman says he does not know of a company by that name.

Regardless, Mr. James is soliciting students for Bank of America credit cards outside McKeldin Library this summer on the University of Maryland's College Park campus.

He is handing students free calculators and miniature basketball hoops for filling out Bank of America credit card applications. He is accompanied by a young woman with a bright-orange ball. She throws the ball to approaching students and asks them to talk to her.

"Instead of training their own employees, they (credit card companies) can contract us out," Mr. James says.

Mr. James' company markets credit cards year-round on campuses for several companies and financial institutions. His contracting company obtains permission to be on campuses, including UMd.'s, he says. He has the same rights to be on UMd.'s campus as the man with the "God" table sitting in front of the Adele Stamp Student Union, he says.

"University of Maryland is not a big school on cracking down too much," Mr. James says. "They just want to know who is on campus."

UMd. does not allow credit card solicitors on campus, says George Cathcart, spokesman for the university. Credit card marketers occasionally attempt to blend in with student groups so they can solicit on campus without the school's permission, but their efforts are shut down, he says.

Despite Mr. Cathcart's strong words, credit card marketers are all over campus, says Amanda Ackerman, a UMd. sophomore. Some credit card marketers put pressure on college students, she says.

Open-door polices

Many colleges have more open policies toward credit card marketers.

Montgomery College, a two-year community college with campuses in Rockville, Germantown and Takoma Park, allows credit card companies to solicit students as long as they receive permission, says spokesman Steve Simon. Mr. Simon says most requests for tables or permission to solicit students during lunch hours come from Visa and MasterCard. The companies often come to recruit students to market their credit cards on campus, he says.

Although it has a policy against other credit card issuers soliciting on campus, Loyola College in Baltimore invites MBNA to offer credit cards to its students, says Leslie Penkunas, the college's assistant director of public relations. MBNA, which is connected with Loyola's alumni association, is invited to come on campus three times a year to market its affinity card to students, says Ms. Penkunas.

St. Mary's College of Maryland allowed credit card marketers to come on campus up until three years ago, shortly after Andristine Robinson became the college's assistant dean of student programs.

"For many students, this is their first opportunity to be involved with some kind of credit card," Ms. Robinson says. "They need to have some level of understanding and responsibility."

When students receive credit cards for the first time, they need to understand the implications of improper use, Ms. Robinson says. Credit cards are a bad idea for the many students who don't have employment or don't understand their responsibilities, she says.

Students generally handle credit well, counters Robert Leighton, Bank of America's marketing manager. Credit cards are bad for students only if they are used in excess, he says.

Many students can handle credit cards responsibly, agrees Catherine Cummings, president of public affairs at MasterCard. Her company provides students with educational resources so they will know their responsibilities, she says.

MasterCard supplies pamphlets on financial management that are distributed by universities such as Georgetown University and George Mason University, Ms. Cummings says.

The incentive for companies is the idea that college students keep their first credit cards long after graduation, Ms. Cummings says.

"It's a potentially lucrative market in the college years and years thereafter," says Greg McBride, a financial analyst for Bankrate.com. With so much to gain, it is no surprise that companies fiercely market their credit cards, he says.

Credit has become widely available to nearly everyone, says Durant Abernethy, president of the National Foundation for Credit Counseling in Silver Spring.

Most important is what parents can do to help their children understand credit and finance, Mr. Abernethy says. Parents should consider obtaining co-signed, low-limit credit cards for their children at age 16 so the students can learn to handle credit, he says. He also advises parents to get their children checking accounts and automatic teller machine cards and teach them how to balance their own checkbooks before they go off to college.

"It is about understanding what you really need, what you want, and living within your means," Mr. Abernethy says.

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