Why Credit Card Marketing in Colleges Needs Restrictions - Essay Example

The Extra Credit Dont Need Singletary, Michelle Summary are vulnerable to marketers and it is obvious that credit card companies want to ‘get’ this class of customers early in their lives so they’d become long term customers for the credit card company. There is another factor that comes into play; the habit factor. If these young students develop a habit of shopping on credit then it will be very hard to get rid of this behavior. They’d be feeling lazy when sometime later in their life they’d feel like switching to cash payment. They’d always consider it OK to use a credit card. Given the facts in the article, it is absolutely necessary to put a muzzle on credit card companies that give away free gifts to lure young students into “plastic bondage”. Credit card marketing in colleges needs restrictions The first reason I agree with the writer’s idea that students don’t need extra credit is that the data shows that there are only 21% people (students) that pay their credit payment each month and only 11% pay even less than the minimum payment. The rest of the student lot (including 11%) rolls over their debt to next month and that’s what puts a big smile on credit card companies. That is exactly what they want to see, credit being rolled over swelling up into more credit. It is no surprise that financial analysts call accumulating debt or credit the eighth wonder of the world. The debt just keeps building up and the credit card holder becomes a financial slave to the credit card company. The second aspect of the article that makes me agree with the writer is the probe that why credit card companies that set up their tables and their ‘poison lemon stands’ in colleges always give away gifts for signing up for a credit card not a debit card. It is obvious that they will get their spending on the gifts back with interests later on. It is hard to imagine that all people holding credit cards would be paying their minimum credit payments regularly, it is simply impossible, that is why credit card companies are ready with their big open mouths waiting for this to happen and they could feed off of the credit chunks. Compare the credit card to debit card, there is no difference in spending principle, the only difference comes when it’s time to pay off. For a debit card, one has to have that amount of money in the bank account thus he can’t in any case spend more than he can afford. On the other hand, it is the credit card that begs the credit card holder to spend more than he can afford. This is where banks cash in tons of money. Once the unpaid credit starts rolling over to the next month, the game begins for the banks to multiply their money. It is called creating money out of thin air. Coming back to the college campus, students don’t know much about how advertisers grab the subconscious of consumers. That is the whole point of the article. It is not an anti-credit card article; the article is to create more aware consumers, be it students or anybody else. If college students can pay their credit in due time without accumulating sick debts, they should get credit cards if it suits them. But luring them to sign up for this evil credit contract by giving away free gifts is just manipulation. Probably only credit card companies would object the action plan of NASPA and U.S. PIRG; their counter-marketing campaign. No prudent person would expect that each student would read the whole fine print of the credit card contract before signing up. That t-shirt or that cap would be on their mind when they’d be signing for the contract and that is just not right. The counter-marketing campaign states that they are not starting a movement against credit card companies; they are merely producing more aware consumers. This is just money shot when they came up with FEESA as opposed to VISA, where FEESA stands for Free Gifts Now Huge Fees Later. This captures the whole point of the campaign. The third reason I agree with the writer’s notion is; back in 2004, a study was conducted that confirmed that almost 56% of the freshman had obtained their first credit card by the age of eighteen. And by the time they reach their senior year, most of them were holding four or more credit cards with a balance of somewhere around $2,864. It is obviously an average, as many would certainly have more than that. This is an alarmingly high number of credit card customers at such an early age. It’s like giving free candy pass to a little child in a candy store, the child will eventually get sick. Coming towards the end of this discussion, here is a breakdown of the problem in very simple terms. If students need credit to pay for books, cafeteria or something related to college campus, how would they be able to pay it next month (or whenever it is due)? Surely an answer would be, ‘when they’ll get their jobs’, which is a conditional statement, there is a time constraint in it, ‘when’, so by the time they get their job, there is a good chance that they would have accumulated some due credit, and that is the whole point of giving away free gifts to campus students. Now the question is how to keep these advertisers in check, the points written in the article are all very practical and acceptable. There should be complete restriction on offering anything free to students in exchange for signups in any form of advertisement from credit card companies. Second, no college authority should be allowed to give away the list of students to convert them into potential customers for credit card companies. Third, no credit card companies should be able to finance any department so they could get something useful to get young students attracted towards their credit card products. The essence of the whole article is to create awareness in students about the consequences of credit card debt. They shouldn’t only focus on the pros of credit cards they should also be aware of the fine prints and how these companies trap people in their credit plans. If they can stay away from the downside of credit card, they can acquire a credit card; however credit card companies shouldn’t be allowed to freely advertise in colleges by giving away free gifts. There needs to be some restrictions on their marketing. Works Cited Singletary, Michelle. "The Extra Credit Students Dont Need." Washington Post. The Washington Post, 18 Oct. 2007. Web. 18 July 2012. . Read More