Ed Mierzwinski is trying to get the word out to college students that the free T-shirt or teddy bear or sub sandwich they accept in exchange for signing up for a credit card could end up costing them a lot of financial heartache.
For years now, lenders have set up tables on college campuses offering free stuff to entice students into signing up for credit. The companies know that if they get these young people early, they are likely to capture a customer for a long time.
Many schools have signed lucrative deals with credit card companies in which they provide contact lists of students or allow sidewalk marketing by the credit pushers. It's an insidious relationship that is justified because the schools get needed funds and officials insist that the cards help students build a credit history.
What many students end up building is a lot of debt.
"They rely on the fact that students are vulnerable," said Mierzwinski, the consumer program director for US Public Interest Research Group.
But now many college students will be seeing new tables on their campuses, marketing a different message.
With a grant from the Ford Foundation, PIRG is heading a coalition staging a national counter-credit card marketing campaign on 40 college campuses nationwide. Instead of a credit card application, students will be handed literature warning them about the fees and terms of certain credit cards. They'll still get free items, including lollipops that say, "Don't be a sucker."
Of course every campaign has to have a slogan. In this case it's a play on Visa, "FEESA. Free Gifts Now. Huge Fees Later."
PIRG has been joined in this campaign by the American Council on Education, the National Association of College and University Business Officers, and the Student Affairs Administrators in Higher Education.
Consumer and higher education groups have become increasingly concerned that college students, many of whom do not have a job or steady income, are getting credit cards without fully understanding the credit terms.
In a 2004 study of credit card usage by undergraduates, 56 percent of freshmen reported they had obtained their first card at 18. The student loan lender Nellie Mae, which conducted the study, said as students progress through school, their credit card usage swells.
By the time they reach their senior year, 56 percent of students carry four or more cards, with an average balance of $2,864. Some have much more than that.
The counter-marketing campaign includes a website (truthaboutcredit.org), planned publication of research reports on credit card marketing practices, and an appeal to colleges to adopt the following:
The campaign isn't an effort to ban access to credit cards by students, but rather create more informed consumers, said Gwen Dungy, NASPA executive director.
"We are trying to use colleges as change agents," Mierzwinski said. "And maybe some will think twice and not get cards."
I don't think any college student needs a credit card. If they don't have the money to pay for school supplies, textbooks, or food (the top reasons they use credit), what are they going to do when the bill comes due?
Oh yes, they'll do what many seasoned cardholders do. They will roll over their balances to the next month and dig themselves deeper into debt.
Not surprisingly in the Nellie Mae report, only 21 percent of undergraduates with credit cards said they paid off all cards each month, and 11 percent said they made less than the minimum required payment each month.
Michelle Singletary is a columnist for The Washington Post. She can be reached at singletarym@washpost.com.
