The act limits the number of card vendors oncollege campuses
By A. Jaynelle St. JeanContributor
Since last year, computer engineering junior Raymond Smith hasacquired two promotional T-shirts, a bouncy ball, a keychain, and afaux-Swiss Army watch — all in exchange for completing credit cardapplications.
Smith represents just one of the 80 percent of students who applyfor credit cards on campus, not because they are looking for a creditcard, but because they want the gift, according to a CaliforniaPublic Interest Group study.
Come Jan. 1, however, recently approved legislation designed toempower and educate college students on the risks of debt, willsignificantly change the way credit cards are marketed to students atcolleges and universities throughout the state.
Assembly Bill 521, known as the Student Financial Protection andResponsibility Act, prohibits the distribution of free gifts tostudents who apply for a credit card and will require debt educationin college and university orientation programs.
Governor Gray Davis signed the bill Sept. 13.
The bill’s author, Assemblyman Paul Koretz said he applauds Davisfor the leadership and vision he showed by signing this bill, toprotect students and empower them to make informed decisions.
“(Credit card solicitors) set up their tables outside the campusbookstore, targeting students who may be financially strapped afterspending hundreds of dollars on books and supplies,” Koretz said in astatement after the bill was signed. “These tactics should be stoppedwith this legislation’s implementation.”
Stopping to apply for credit cards hampers students when they aretrying to get from place to place, said Smith, who was once held upby a vendor who asked him to fill out one application, and then askedhim to complete four more while he was in the process of filling outthe first.
Students don’t need to be hassled about credit cards; if they wanta credit card they’ll go to the bank and apply for one, he said.
“Students will sign up for credit cards not necessarily becausethey need or want a credit card, but because they want that immediategratification of having a T-shirt or a bag,” said vice president ofexternal affairs Priscilla Ocen. “Taking away the inducement willmake it less likely that students will sign up for credit cards andget themselves into debt.”
Moises Cardoso, 19, solicited credit cards to students at SDSU andSouthwestern College using incentives like phone cards beforequitting five months ago.
“There’s not too many people who are actually looking for a creditcard, but if you say ‘Hey I’ll give you something that you want,’they’ll be like ‘What the hell, it’s only going to take me a fewminutes and I’m going to get something,'” he said. “It’s basically abribe.”
Even with the new legislation, however, credit card companies willstill have access to students because schools are allowed to havecontracts with them. The new legislation forces credit card vendorsto register with college and university administrations and limitsthe number of tabling sites, but does not completely ban theirpresence.
SDSU is in the middle of an exclusive, five-year contract withFirst USA that allows them to solicit on campus and at athleticevents, said university spokesman Jack Beresford.
Not only will some vendors still be allowed on campus, but thislaw does not prohibit them from soliciting on city property, like thealley by KB Books where thousands of students pass by every day, Ocensaid.
Scott Svonkin, Chief of Staff for Koretz, said the city has anethical responsibility to enforce similar rules.
“The assemblyman’s legislation was intended to impact all placesthat serve students so he would hope the city would impose similarrestrictions on credit card marketing,” he said.
Koretz said he is hopeful that the growing evidence that manycollege students who, upon graduation, are already burdened withmassive credit card debt will end because of this new law.
