Reasons Credit Card Companies Like to Target College Students in 2023

Few students graduate from school with a credit card debt that's over $5000. I know that sounds relatively scary, but it's the unfortunate truth. According to a piece published on TrueCredit.com, 1 in 10 students leaves the school with more than $10000 in debt. One can easily relate to the fact that if you've just graduated from college, getting your first job can be daunting, sometimes, it feels impossible. We live in a world where making it on your takes putting in the 'extra' in the hard work. Don't get me wrong, you can make it on your own, but as far as the global job market is concerned, taking this route is a bit difficult. Now imagine trying to fend for yourself job-wise and at the same time, struggling to deal with a credit card debt. Well, what could be scarier?

Not trying to build up fear in you, but you've also got utilities and rent to deal with. Remember that car note? Well, that's something worth pondering about. Imagine yourself dealing with all of these at this early age. You know how tough this is.

Credit card debt in Colleges

At a time when lenders who gave loans (most especially home loans) to people who couldn't afford to clear their debt are being held responsible for the poor economy, you still find it baffling that college student remains the primary target for most credit card issuers. One shocking discovery showed that colleges are still being flooded with lots of credit card flyers as well as brochures. At this point, you start to ponder on what the real problem could be. Even though it seems unfathomable, many card issuers today still think it through to lure in first-time cardholders.

Regulators are currently looking for a way to solve this crisis. In 2008, The House Financial Services Committee on Financial Institutions and consumer credit held a press conference to deal with the troubles that were starting to pop up amongst college student with their credit card issuer.

The unhealthy love tangles

It goes without saying that lots of credit card companies have this unhealthy relationship with college students metaphorically speaking. Advisedly, before going to college (if you are lucky enough to have not experienced the trouble yet), then you need to watch the movie "Maxed Out", this will give you a clear view on what is currently going on in many colleges today. Of course, this is not a movie review piece. Our main goal is to discuss in details while trying to proffer solutions, as well as provide an answer to that one question you've always wanted an answer for: Why Do Credit Card Companies Target College Students?

The truth is, most of these credit card companies love to get young students for some reasons. The first point that readily comes to mind is that most card-issuing companies believe these students have parents who would do whatever it takes to bail you out. Your parents would readily do whatever it takes to pay off the debt on your behalf. Secondly, they believe these college students have long years ahead of them as far as their credit life is concerned. Unfortunately, in as much as you hate to hear this, the truth is, they have a solid plan.

Years ago, credit card issuing companies craved for college students. This was why it felt so easy to get your applications even when you knew you didn't meet the criteria - remember? This was why they did what they did. For instance, a student could get a credit card without having a reliable job, a credit history, a co-signer, and a verifiable means of livelihood. College students can now heave a sigh of relief knowing that it will be relatively difficult to fall for their trick knowing that these companies are now required to verify students' income issuing them a credit card. This is all thanks to the new credit card law. And if you don't have a verifiable income, you are required to get a cosigner to qualify for the credit card.

The next time you see a credit company in your campus, know that they can do what they do simply because they've paid your school administrators money that sometimes runs into millions - all of these, just to have a chance to market their credit card to students. Now, you are probably wondering, why would a company pay millions of dollars just to be able to market cards to people who don't have the capabilities to pay back or generally manage the loan? Oh, we haven't finished yet. Did you know students also get kickbacks from each credit card gotten, these students also get a certain percentage for each charge made? So, why all of these benefits? Well, the truth is, why students are busy looking at the short-term benefits, the companies, on the other hand, have already painted a bigger picture. Unfortunately, what the 'short-term' benefits and 'bigger picture' have in common is a long-term of struggles to pay back especially for those who don't have the means to service the loans. The secret? These credit card companies are banking on these college students to make up for these 'investments' is through the student's charges.

The strategies used by credit card companies

These credit card companies have one thing in common. They make use of the same marketing tactics. Listen, these companies understand the school's demography. They can do this in many other spheres of their business, so, you don't think to do the same for a college would be difficult. Take a look at the marketing skills they use to attract these students, especially students that are applying for a credit card for the first time. The strategy here is giving out these cards for "Free."

When a credit card company makes you believe you can have a credit card for free without going through a 'rigorous' process to acquire it, you'd surely be encouraged to get one. Now, this is where the luring takes off. This is why you often see credit card company representatives on campus (mostly during resumption) handing out free kinds of stuff for applying for a new credit card. While the law frowns at giving out stuff like frisbees or t-shirts on campus, the law supports handing out items such as coupons for a free meal. But that's where the luring begins. One thing you need to understand is that these are all Greek gifts, one way or another, they will have it back. But it won't be coupons or statement credits, but they will get it back. To these credit card companies, these gifts are simply 'investments.'

You know what they say about gifts. No matter how nice free things are, most times, the underdone isn't as sweet as it seems. It's ok to give out gifts, but as far as a credit card is concerned, they need to follow the procedure which on the other hand is quite tough. Students should be suspicious of companies bending rules to offer you their products. It isn't coupons you are getting when you apply for a credit card. You are also signing up for years of debts, one which you may never recover from. But you can change this.

What the law says

According to the federal law, credit card companies are not allowed to give credit cards to a student who is below the age of 21 and don't have a steady or verifiable income as well as a cosigner. On the other hand, the law seems to be quiet on the specifics that qualifies as income and the types of proof a credit card company needs to give out these cards. This is the loophole that is been taken advantage of. This law is not specific. At the end of the day, you should stay away from credit card companies that are offering gifts all in the name of having you to sign up for a credit card.

Two things you can do to stay off these companies is finding a reliable credit card and making good use of the funds you have in your credit card. You should stay away from unnecessary spending. This way, you won't graduate with thousands of dollars in debt. This can be pretty counterproductive.

Conclusion

At the end of the day, your future is in your hands, and if you don't want to mortgage it over a gift and a credit card that will be more of a liability to you in the future. Then you need to watch and be very careful with the type of credit card you sign up for. Even though it seems the government is doing nothing about it, you have to take your future by the horns and do the right thing. Your best bet? Get a quality education. Many students still need to learn more about the pros and cons of credit cards.