One of the biggest ways that credit card companies try to increase revenues is by targeting college students with special offers.
However, as part of the 2009 Credit Card Accountability, Responsibility and Disclosure Act, the firms are no longer able to offer giveaways such as shirts or other items in return for getting a student to sign up. Many colleges are paid handsome fees to allow the companies and banking institutions to be able to gain access to its attendees.
In one payout, FIA Card Services, a subsidiary of Bank of America, gave the Penn State Alumni Association $4.3 million to gain access to the students.
Some financial experts, however, say that young people need to learn how best to engage in the borrowing field.
“We need to educate young people about how to manage money but also how to make money, as in how to become entrepreneurs,” Sharon Lechter, a business writer, said in an interview with Fox Business. “That’s the only way we’re going to save this generation.”
Credit card usage in general has gone up during the past year. The Equifax National Credit Trends Report found that merchant services-related transactions were 25 percent higher in January to August 2011 than at the same point in 2010.Back To Blog