NY Attorney General targeting credit card companies
TEXT OF STORY
Kai Ryssdal: Just in time for college kids getting back to school, New York Attorney General Andrew Cuomo has announced an investigation into deceptive credit card marketing that’s targeted at college students. Cuomo wants every college and university in New York to share any exclusive marketing contracts they have with card companies.
From the Marketplace Education Desk at WYPR in Baltimore, Amy Scott reports.
Amy Scott: Jesika Becker is a senior at the University of Minnesota. She owes almost $20,000 in student loans. And more than $4,000 in credit card debt. That’s about the average for college seniors these days.
Jesika Becker: I put my books for the semester on my credit card. I put a replacement laptop to fix my old laptop.
New York Attorney General Andrew Cuomo is looking at the marketing deals many colleges have with credit card companies. The card issuers get student contact information and the right to use the school logo. The college often gets a cut of the charges on the card.
Ben Woolsey is head of consumer research at CreditCards.com. He says college students tend to be loyal customers.
Ben Woolsey: If they get the card while they’re in the college, and it’s one of their first cards, they’ll tend to keep it much longer. It’s a much more profitable long-term relationship for the card issuer.
Especially if that student racks up a lot of late fees and finance charges. Under recent reforms, card companies can no longer entice students to fill out applications with free pizza and t-shirts. Anyone under age 21 needs proof of income or an adult to co-sign.
Consumer advocate Ed Mierswinski with U.S. Public Interest Research Group says those steps go a long way toward protecting young people.
Ed Mierswinski: But Cuomo should absolutely continue to push farther. He should make sure credit card companies are complying with federal law.
One big card issuer, Bank of America, says it stopped marketing on campus before the law took effect.
I’m Amy Scott for Marketplace.Re
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
