The New York Times

Pushing Colleges to Limit Credit Offers to Students

Charles Delafuente, October 17, 2007

Andrew Shapransky, a freshman at Vassar, says that even if credit cards are as common as pizza among college students, “I have no intention of getting one.”

Mr. Shapransky, 18, an aspiring doctor from Webster, N.Y., is on a limited budget and knows he cannot pay the bills. But many find it hard to resist the barrage of credit-card offers on campus.

Nationwide, colleges are coming under new pressure to limit aggressive marketing by credit-card companies to students. This month, the United States Public Interest Research Group, a consumer-advocacy organization, began a campaign that urges colleges to restrict soliciting of students by such companies.

Ed Mierzwinski, director of the group’s consumer programs, said on-campus campaigns with gifts may be more dangerous to students’ financial health than other approaches. There is a “tendency for impulse purchase of the card itself,” he said.

“If someone offers you a Frisbee or a T-shirt or says a campus club is going to get $1 for every application, you might get a card you don’t need or don’t want,” he said. One of his group’s goals, he added, was “to encourage students to think about whether they need a card.”

Kenneth J. Clayton, managing director of the American Bankers Association’s card policy council, said only 25 percent of college students received their cards through on-campus promotions. And he said the percentage of student cardholders who carried a balance rather than paying their bills in full was no greater than the portion of other cardholders who carry balances.

Still, parents may welcome the campaign, especially those who fear that their children might damage their credit ratings.

Deborah Sussman, of New City, N.Y., said she warned her daughter, Sara Lipshutz, who entered Swarthmore this semester, about the dangers of easy credit. “I don’t think she has enough experience to know the ramifications of using a credit card and having to pay it back,” Ms. Sussman said, adding that her daughter promised not to get a card.

But beyond issuing stern warnings, there is nothing a parent can do. An 18-year-old is legally an adult, explained Rod Griffin, a spokesman for Experian, a major credit bureau, so parents cannot prevent a company from offering their child a credit card.

Credit bureaus, he said, are set up to collect information only from lenders and court files. None, he said, would know what to do with a letter that read, “Please be advised that my son/daughter is a poor credit risk who has no income and no way to repay charges.”

Credit-card companies like students “because they have parents who will probably pay off their debt if there is a problem,” even though parents generally have no legal obligation to do so, said Bill Hardekopf, the chief executive of, which tracks credit-card rates.

With two or three cards from different banks, a student could be in trouble quickly. Robert D. Manning, author of “Credit Card Nation: The Consequences of America’s Addiction to Credit,” and a professor at Rochester Institute of Technology, said that in a study two years ago, he found that even students “from families with a strong emphasis on savings began to reflect behavior of more-spendthrift peers” before they graduated.

Prof. Elizabeth Warren, a bankruptcy law expert at Harvard Law, said, “Congress hasn’t put even basic safety regulations in place, so parents need to teach their kids basic survival skills.”

Representatives John J. Duncan Jr., a Republican from Tennessee, and Louise M. Slaughter, a Democrat from New York, reintroduced legislation in the House this month to limit the amount of credit available to a full-time student and bar lenders from giving students with no income who already have a credit card any additional ones. They have unsuccessfully sponsored such legislation for a decade.


This story ran on The New York Times on October 17, 2007.