Cards pushed at CSULB
By Kristopher Hanson
Daily Forty-Niner
Every semester students
gather around credit card booths in front of University Bookstore, enticed
by promotional gifts like t-shirts, free phones and discounts to local
businesses. Banners promise low interest rates and no annual fees.
"The scheme is to
get them (students) into debt," said Anthony Demman, law office administrator
for the Consumer Legal Center in Long Beach.
"A $10,000 debt at
19 percent will take a person 40 years to pay at minimum payments.(By the
time you finish payments) it can cost $45,000 on a $10,000 loan," he said.
"They (the credit
card promoters) just came up and said that if I signed up it would help
support a women's shelter," said Staci Paulus, a junior, adding that neither
a job nor any source of income was required for the application.
Paulus, who said
she has a job and is financially secure, is in the minority of students
who sign up for these credit cards. Most sign up without realizing that
interest rates can be high, usually around 20 percent annually, Demman
said.
The credit card companies
are allowed to set up their booths on campus after making arrangements
with the Forty Niner Shops Inc.
"The (credit card)
booths are assessed a fee per week or day and based on space available,"
said Roman Gulon, chief executive officer of the Shops. "Every dollar that
is spent stays on campus."
"It can take 10 years
to recover from bankruptcy," Demman warned. "A lot of employers are now
doing credit checks (to see if a potential employee is responsible)."
"Credit cards are
not to be abused and should be used only for necessitiesÖtry to be responsible,"
Gulon said.
However, the times
may be changing for credit card companies marketing to students on California
State University campuses.
A resolution recently
adopted by the California State Student Association Board of Directors
(CSSA) seeks to limit the number of credit card booths allowed to market
on campus. The resolution was brought in response to a concern that credit
card companies increasingly target college students, exasperating the problem
of loan debt among students.
According to the
CSSA office, the proposed resolutionís policies would:
-
register the sites and
considering limiting the number of sites allowed on campus.
-
prohibit offering gifts
to students for filling out applications until the student has read debt
education materials prepared by the campus or a non-profit debt education
program.
-
include debt education
materials in shopping bags at student bookstores.
-
offer debt education
and counseling programs to students.
-
give each campus the
flexibility to adopt a policy appropriate for their campus.
"The CSSA has
determined that the amount of consumer credit debt by college students
is reaching an all-time high," said Shaun Lumachi, financial aid officer
for the CSSA and author of the resolution.
"Aggressive marketing
practices attract students to sign up for credit cards by providing free
gifts for filling out credit card applications," Lumachi said.
Students are often
forced to repay their credit card debt with student loan money, appeals
to family and friends for loans, cutting back on course work to increase
the amount of time at paid jobs or even dropping out of school, Lumachi
explained.
"I want to target
the way they market their product," said Lumachi. "I'd like to encourage
credit card companies to provide education leaflets and information on
how to be responsible card usersÖdon't entice our students with free gifts."
A national hotline
offering financial and legal help is available through Consumer Legal Center
at (888)-305-HELP. |
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