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Campus Credit Cards

Thursday, November 08, 2007

Credit card companies are self-profiteering and even predatory. Credit card companies aim at alluring you and keeping you in a life-time debt to raise revenues. Credit companies victimize even those least capable of carrying all those APRs and various fees and thus are called treacherous. These are the statements you often hear from average American credit cardholders and most often from low income households or Latino and African American families.

Well, not long ago a similar discontent with creditors' practices was expressed by the student body and some teachers as well.

The increasing number of student credit cards fiercely promoted by credit companies at campuses is by far not intended to teach them personal finances management or help them build a good credit history.

So, who gains most through student credit card deals? Whose interest do they actually serve? Well, the fact that banks and credit companies keep existing at the expense of fabulous credit card rates and various fees, very frequently unfairly imposed on customers, is not new.

But the fact, that it is credit-uneducated students that become companies' major game, is just outrageous. Worst of all is that the school is not only unwilling to protect its students from predatory policies, but it encourages credit card deal making at the campus.

Let's go deeper into the matter and try to make out the mutual benefit coming from the teaming of creditors and the school. Our research at Virginia Tech has shown that its students were offered unusually unfavorable credit card terms and the so-called "double-cycle" billing which made the already high terms almost unmanageable.

Why do we wonder then that such a great number of students graduate with so much credit card debt they cannot qualify for a car loan or mortgage?

The most deploring thing is that it's the school itself that sacrifices its students to the companies and its interest is more than evident. Making a business agreement with a credit card company, the school draws the necessary revenues to maintain the building and the staff.

Being supported primarily by the state revenues, schools and public universities are well aware of the profit they will get from, say, a $20 million deal with a credit card company. Yes, the creditors pay schools to relieve them from increasing financial pressure, providing them with a good and steady source of income.

According to the schools and credit companies, both state that student credit cards, like those from Chase bank or Citibank, help young people start their credit history on milder conditions and special care.

This statement is a delusion considering the results of our study. Is it special care when students are charged interest higher than those with business credit cards, those who are more knowledgeable about credit cards and their tricks?

What milder terms can we speak about when the double-cycle billing method keeps students in insuperable debt?

So far, schools agree and are allowed to give mail access, addresses and names of students to credit card companies and the amount of student credit card debt means the teaming is in its development and is flourishing as never before.

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