Proposed bill to prevent credit card giveaways
Companies preying on students bring legislation forward
Matt Hopf / Associate News Editor
Issue date: 9/26/08 Section: News
Mollie Kelley receives a credit card application at her home almost every day.
The financial education coordinator at the Health Education Resource Center said when she goes home, there is a big stack of credit card applications on her desk.
She said credit card companies have it backwards when they target college students.
"Wait until after school when they have more money," Kelley said.
In an effort to prevent college students from being offered gifts from credit card companies, Illinois State Treasurer Alexi Giannoulias is proposing a new bill, which would prevent the companies from preying on students.
The bill, which will be introduced when the General Assembly reconvenes in January, would ban credit issuers from offering any gifts when marketing credit cards on campuses.
Treasurer spokesman Scott Burnham said this eliminates the "sandwich loophole" that some companies offer.
Burnham said the companies would offer students a free sandwich or a pizza, but they can only redeem it if they visit an off-campus restaurant.
"When you get there to get the sub or pizza, you have to apply for the credit card or give personal information," he said.
Burnham said parents and students suggested the banning of the practice.
"We've heard from a lot of parents and students who have complained that credit card companies preyed on students," he said.
The proposed bill would also prohibit the selling or transferring of student names and personal information by colleges, universities, their foundations and alumni associations to credit card lenders. It would call on schools to disclose marketing agreements with banks that target students, and require schools to conduct financial literary education for freshmen if the schools allow marketing or advertising of credit cards to undergrads.
The bill would include all both private and public schools, Burnham said. The bill will not ban credit cards on campuses, he added.
Kelley said she would definitely support a crack down on giveaways.
"It's so much financial trouble than it's worth," she said.
She said one of the biggest locations where people apply for a credit card for a giveaway is at major sporting events.
Eastern does a good job not allowing credit card companies to offer giveaways, Kelley added.
The average family has four credit cards, Kelly said.
With the use of credit cards, families can be thousands dollars in debt.
Students may also think they are ready for credit cards when they receive preapproved applications, even though many do not have a steady financial income.
Kelley said if students were in credit card debt, she would have them set up a budget and pay off one credit card at a time. Unnecessary purchases are another issue for students, as they need to control spending, she added.
Kelley said identity theft is another major problem, and students should check their credit report. People can check their credit report for free, three times a year.
If students need help with managing their finances, they can call HERC at 581-7786.
Matt Hopf can be reached at 581-7942 or at mthopf@eiu.edu.
The financial education coordinator at the Health Education Resource Center said when she goes home, there is a big stack of credit card applications on her desk.
She said credit card companies have it backwards when they target college students.
"Wait until after school when they have more money," Kelley said.
In an effort to prevent college students from being offered gifts from credit card companies, Illinois State Treasurer Alexi Giannoulias is proposing a new bill, which would prevent the companies from preying on students.
The bill, which will be introduced when the General Assembly reconvenes in January, would ban credit issuers from offering any gifts when marketing credit cards on campuses.
Treasurer spokesman Scott Burnham said this eliminates the "sandwich loophole" that some companies offer.
Burnham said the companies would offer students a free sandwich or a pizza, but they can only redeem it if they visit an off-campus restaurant.
"When you get there to get the sub or pizza, you have to apply for the credit card or give personal information," he said.
Burnham said parents and students suggested the banning of the practice.
"We've heard from a lot of parents and students who have complained that credit card companies preyed on students," he said.
The proposed bill would also prohibit the selling or transferring of student names and personal information by colleges, universities, their foundations and alumni associations to credit card lenders. It would call on schools to disclose marketing agreements with banks that target students, and require schools to conduct financial literary education for freshmen if the schools allow marketing or advertising of credit cards to undergrads.
The bill would include all both private and public schools, Burnham said. The bill will not ban credit cards on campuses, he added.
Kelley said she would definitely support a crack down on giveaways.
"It's so much financial trouble than it's worth," she said.
She said one of the biggest locations where people apply for a credit card for a giveaway is at major sporting events.
Eastern does a good job not allowing credit card companies to offer giveaways, Kelley added.
The average family has four credit cards, Kelly said.
With the use of credit cards, families can be thousands dollars in debt.
Students may also think they are ready for credit cards when they receive preapproved applications, even though many do not have a steady financial income.
Kelley said if students were in credit card debt, she would have them set up a budget and pay off one credit card at a time. Unnecessary purchases are another issue for students, as they need to control spending, she added.
Kelley said identity theft is another major problem, and students should check their credit report. People can check their credit report for free, three times a year.
If students need help with managing their finances, they can call HERC at 581-7786.
Matt Hopf can be reached at 581-7942 or at mthopf@eiu.edu.
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