Credit and College Students


Banks are getting more aggressive - and creative - in their efforts to pitch credit cards to college students by hawking cards near college campuses and striking exclusive partnerships with college alumni associations, according to a growing body of research.

The latest sign: A study released by the U.S. Public Interest Research Group shows that 76% of students say credit cards have been marketed to them through tables set up on or near college campuses, and nearly a third of these students have been offered a free gift to sign up. T-shirts were the most common gift given, but students also received Frisbees, candy, pizza - even iPods - to fill out a credit card application, according to the group's research.

No comparable data exist for previous years. Still, the group's research provides anecdotal evidence that "credit card companies are increasing their efforts to target college students," partly with "free gifts that appear to be getting more substantial" in value, says Ed Mierzwinski, consumer program director at US PIRG.

College students have long been an attractive demographic to banks because they have few financial ties. Banks compete to provide students with credit cards and bank accounts in hopes that students will come back to the banks when they need mortgages and car loans.

But as students' debt loads have soared - along with the cost of college - regulators have become increasingly concerned about the marketing of credit cards to students. More than half of students are now charging books to credit cards, while nearly a quarter are using them to pay tuition, US PIRG says.

In 2004, the average undergraduate owed $2,169 on credit cards, while the average graduate student owed $8,612 in 2006, Nellie Mae data show. Research conducted by USA TODAY two years ago shows that despite nearly a dozen states' restrictions on credit card marketing on college campuses, banks have become more aggressive about reaching students through phone calls, e-mail and off-campus locations.

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