Perils of Credit Card Marketing on Graduation Essay

Perils of Credit Card Marketing on Graduation from college should be an exciting and renewing experience. It represents an accomplishment that should be celebrated and the beginning of new adventures and experiences. Yet, for many recent college graduates it represents something entirely different. For these individuals graduation from college represents having to begin their new careers drowning in debt with credit scores below 500. The cause of this unfortunate circumstance is often the improper use of credit cards given to these individuals on their very first day on campus straight out of high school (Lazarony, 1999).

The credit card market is very competitive. The college age consumer is an attractive one for credit card companies. They have a captured market with individuals possessing a minimum degree of financial sophistication. As a result, credit card companies are able to issue cards to young people who are not able or willing, to understand the complex fees and associated costs that accompany the use of these cards.

Students are easy prey for the credit card companies. Entering college young men and women are often experiencing their first taste of independence. Accustomed to living under their parents' homes and the accompanying rules, they are eager to being orchestrating their own affairs. Having witnessed their parents using credit cards for years they identify such use as a sign of being "grownup" and the fact that credit card companies appear to be falling over themselves to offer them cards makes having one even more appealing.

Added to this is the culture of debt that students find themselves in when they enter college. Beginning early in the decision making process, students are told repeatedly that paying for school is no problem: "just borrow the money."

College admission counselors tell students how easy it is to qualify for loans, emphasize how everyone is doing it, and how long they have to repay them. Students soon determine that accumulating debt is part of the college experience and that credit card debt is just one more form of it.

The unfortunate part of this scenario, however, is that the credit card business is not governed by the same rigid restrictions placed on the student loan industry. Student loan companies do not use T-shirts and other give away programs as rewards for applying; Student loan companies do not use fellow students to solicit their potential customers, and student loan companies are not allowed to solicit customers in the comfort of the student's dorms. Each of these techniques is used extensively by credit card companies

Another pitfall for young students, accustomed to being nurtured by their parents, is the fact that many of these credit card company solicitations appear to have the support of the university. Students moving from their parents' home look to the safety of the university as their support system and, as a result, they view the fact that the university not only allow the credit card companies to solicit at on-campus but also, in many cases, partner themselves with one company or another as sign that the university is ratifying the use of credit cards. This arrangement may cause the student to adopt a feeling of security that is unwarranted.

The problems caused….....