Senior Kristina Young was walking down 13th Avenue last year when a man with a clipboard approached her and asked “Could you help me out?”
Next to a booth surrounded by piles of T-shirts and sunglasses, the man told her that if she signed a credit card application, she’d get a free gift while doing him a favor. With a recent $500 car maintenance bill on her shoulders, Young thought a credit card would be handy and signed the dotted line within a few minutes.
Nearly a month later, the anthropology major checked her mailbox expecting one credit card — but found three instead.
“They kind of rush you through it,” she said about the application process. “I thought I was signing up for one credit card. But I got a whole slew of them and had to cancel them all except for the one I wanted to keep.”
Young is just one student among hundreds who has signed on for credit before reading all of the fine print, according to a credit card report released this week by OSPIRG, a public interest research group. The report identifies some local and national marketing practices on college campuses as “deceptive” and offers students tips on avoiding “unfair traps” and expensive fees.
Citibank, which also owns the AT&T Universal Card, is one of the most common credit card companies seen on campus, especially in the first couple weeks of school. But Citibank spokeswoman Maria Mendler said the company wants customers to know what they’re signing for. And students are not seen as vulnerable targets but as potential long-term customers, she said.
The report, titled “The Credit Card Trap: How to Spot It, How to Avoid It,” includes practices used on state campuses such as the University, Lane Community College, Portland State University and Southern Oregon University.
According to the report, many marketers are reluctant to answer questions in-depth or allow students to take applications away from tables. High interest rates and special terms are also buried in fine print, which students don’t get the chance to read.
Mendler countered that college students are responsible adults who can make educated decisions, and solicitors do not try to trick them.
“If you’re offered something, you should read about it first,” she said. “We obviously want our customers to understand what they’re applying for, (but) it’s the responsibility of the person to make an informed decision.”
OSPIRG Consumer Associate Steve Dixon said that although students are capable of making educated decisions, many have little credit experience and are not given enough time to read all of the terms and conditions.
“Free gifts really lure students into filling out applications when they’re not really sure what they’re getting into,” he said. “(Marketers) don’t encourage comparison shopping, and students don’t always pick what’s really best for their financial interests. It’s similar to impulse buying.”
He added that many credit card companies on campus do not make information such as late fees easily accessible. The report shows that some credit card companies on campus charge introductory interest rates as high as 21.4 percent.
The report’s national segment includes a survey from more than 400 students and documents that undergraduate card carriers had an average balance of $2,748 in 2000. Half of all college students with credit cards also didn’t pay their balances in full every month.
But Mendler said many students are financially responsible — they just have to be careful with their cards.
“We have been in the credit-card business for quite awhile and offered college students credit cards for over 20 years,” she said. “Students are generally responsible. Credit cards should be used as a form of payment, not extension of income.”
She added that many parents want students to have cards in case of emergencies. Credit cards also help them establish a good credit history for the future, she said.
OSPIRG Campus Organizer Jo Voss said students do not need to avoid credit card use altogether but should be aware of “gimmicks” and make cautious decisions.
“We’re not anti-credit cards,” she said. “We’re just asking students to not jump right in to fill out an application for free gifts but to compare credit card companies. (Marketers) know how to appeal to students. They’re sales people, and unfortunately they do their job well.”