States Curb Campus Credit Card Marketing

Associated Press Writer

ALBANY, N.Y. (AP)--For college-bound high school graduate Kenneth Cashwell, the credit card offers started coming that summer of 2000 too fast to count and too alluring to resist.

Cashwell eventually succumbed to promises of low, low rates, no payments for three months, and even an appeal to fiscal responsibility: ``Start building your credit now.''

Within two years the Queens, N.Y., resident had applied for six credit cards, and his debt was mounting toward $4,000. His credit card bills topped $100 a month while he was a mostly unemployed, full-time student at the State University of New York at Farmingdale.

``I had a pile of people just basically giving me money,'' Cashwell said. ``I figured I would get a job and be able to keep up ... It became a never-ending cycle.''

The New York Legislature this week passed a measure that would prohibit the deluge of credit card offers on campuses and requires some consumer education.

Nine other states--Arkansas, California, Hawaii, Illinois, Louisiana, Missouri, New Mexico, Virginia, and West Virginia--have passed restrictions or required studies of credit card solicitation on campuses this year, according to the National Conference of State Legislatures.

Seven other states have pending proposals.

If signed into law by Gov. George Pataki, New York would end tables of solicitors offering gifts for sign-ups, as well as the junk mail in dorm mailboxes and every bookstore shopping bag--with colleges often getting a cut.

The market has created an explosion in credit card holders and debt. Sixty-seven percent of all college students have at least one credit card, 24 percent more than in 1990, according to national research included in the state bill. The average balance also has ballooned from $900 in 1990 to $2,100.

The college credit boon was building when William Boyland Jr. was a freshman in the late 1980s at Virginia State University.

``When I went into college it was the first thing I saw, with water bottles, free T-shirts, you name it,'' said Boyland. He said the debt haunts the students after college as they pay too much of entry-level paychecks to finance charges.

``There's no thought to the repercussions when you're 28 or 30 and you try to buy a house,'' Boyland said.

As a freshman New York assemblyman from Brooklyn, he sponsored the bill, saying he hoped to give students ``a fighting chance.''

``Credit card companies are very aggressive and tend to prey on kids who don't know the difference between educational credit (to pay tuition) and consumer credit,'' said Cynthia Bailey, executive director of The College Board. ``If they want credit, they can always find it themselves. They don't have to have it crammed down their throat.''

She said the consumer education requirement could be the strongest element of the bill. She said many colleges have already added consumer education to their freshman orientation to avoid ``crippling debt.''

Neither she nor Richard Wong of the American School Counselor Association based in Alexandria, Va., had heard of similar laws in other states.

Credit cards ``are very useful and in the right way can be very beneficial,'' Wong said. ``But very often students don't get the (consumer) education and they tend to get exploited as a willing market.''

A spokesman for California-based Visa didn't respond to a request for comment.

Miriam Kramer of the student-backed New York Public Interest Research Group said the measure addresses an extraordinary problem.

``Students are adults and should be treated as such, but campuses shouldn't be a free-for-all for predatory and deceptive companies,'' Kramer said.

For Cashwell, the calls from collectors and his decision to simply not open the junk mail brought an end to his debt cycle.

``They called and left endless messages,'' he recalled. ``I worried they would drag me out of bed.''

Four years after the deluge of credit card offers, the 22-year-old college graduate and manager of a Hicksville, N.Y., restaurant has emerged from debt.

``It took a long time for me to settle up. I just settled with about everyone,'' Cashwell said Wednesday. ``I'm a standup guy.''




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