aTypical Joe: a gay New Yorker living in the rural South

Monday, March 31, 2008

Keep predatory lenders off college campuses!

I made my nephew sit through this story from ABC News about a student who used a Visa card with a $500 limit to charge her $350 tuition. Unfortunately, the card had an additional $100 origination fee and a $10.95 monthly maintenance fee so instead of enrolling in school the student wound up with a job to pay off her credit card bills.

In the story a former bank employee says the boss called cardholders “the scum of earth,” “lowlifes” and “deadbeats.” I paused the video after an industry spokesperson, President of American Financial Services Association Chris Stinebert, justified such fees by saying, “We firmly believe that everyone should be well-informed” and “it seems fair to me...”

My nephew pleaded, “Uncle Joey I haven’t had my coffee yet.”

And therein lies the problem. He doesn’t want to watch that story. He wants me to take care of it for him. And, really, isn’t that only fair and just?

On Friday the Chronicle reported on a study that found students want limits placed on credit card marketing:

Although many college students have plastic in their wallets, most support at least some limits on credit-card marketing, according to a new survey by the U.S. Public Interest Research Group. [...]

Among the survey’s other findings:

• Students reported receiving an average of nearly five credit-card solicitations per month.
• Sixty-six percent of students said they had at least one credit card, while 34 percent said they carried a balance from month-to-month.
• Fifty-five percent of students with credit cards said they had used them to pay for day-to-day expenses, and 24 percent said they had used credit cards to pay for tuition.

Information about the survey is available on the group’s Web site.

To those of you who say that my nephew should grow up, my answer is that the research shows all of us would benefit from learning what the marketers already know: when we make decisions we think we’re in control, making rational choices. But in reality we’re much more predictably irrational than we ever realized.

Those college students are on to something smart. More on that in a future post.