Last Chance To Market To Colleges For Credit Card Companies

This semester will be the last time that credit card companies can market their credit cards directly on college campuses. Next semester, they will no longer be able to do so due to the Credit CARD(Card Accountability, Responsibility and Disclosure) Act.

College students have long been one of the most marketed consumer segments for credit card companies. Although mainly composed of subprime borrowers, the spending and payment habits of college students make them very attractive for credit card companies who are looking to make profit on fees and not on bill payments. Regulators have wizened up, however. With the Credit CARD Act, they are looking to curb irresponsible credit card usage, especially among college students who are in grave danger of this practice.

The new regulations in the Credit CARD Act will prevent the marketing of credit cards in college campuses. It has been the practice of credit card companies to run massive marketing gimmicks during the opening of a semester to get college students to sign up for their credit cards. They often use high pressure tactics such as free consumer electronics and other items to students who sign up.

The Credit CARD Act also aims to nip the problem in the bud by limiting the ability of college students themselves to acquire credit cards. Once the legislations in the Act go live on February of next year, college students will not be able to apply for a credit card unless they have a co-signer for their applications or they have proof of their financial capability to pay off their debts.

All of these upcoming legislations mean that credit card companies now have an encircled date after which they will no longer be able to exploit the college credit card market. Many analysts expected credit card companies to go for a mad rush to sign up college students this semester in a bid to win over as much college clients as possible. Others took the opposite view, predicting that credit card companies would hold off on signing up college students to curb subprime borrowing, diminish their risks and cover their profits.

The reality seems to be a mix of both. Some credit card companies are pulling out of the college marketing gimmick while others are still at it. As a result, college campuses are now seeing less credit card marketers this semester. It may be that credit card companies have learned their lesson regarding subprime college borrowers. One can only hope that the new batch of college students starting this semester are just as enlightened as well.