Woman holds an array of credit cardsConsumer advocates say most Americans are unaware of the cozy relationship many colleges have with credit card companies, and they applaud New York State's efforts to intercede at its public colleges. As we told you yesterday, the state's 64 SUNY campuses agreed to a code of conduct drawn up by New York's Attorney General to protect students from being taken advantage of by credit card companies.

While the CARD Act put the kibosh on some abuses (such as offering a T-shirt, water bottle or some other student-friendly freebie to coax kids into applying for credit), that's just the tip of the iceberg when it comes to issuers' sneaky behavior. What's perhaps even more worrisome is that it's very likely that New Yorkers didn't even know about all the ways card companies used colleges as conduits to worm their way into students' wallets.


Consider this: The new New York rules don't let SUNY share student data with card companies unless they have permission to do so. It stipulates that all on-campus card marketing must be monitored and requires that any exclusive card agreement be in the students' -- not the card companies' -- best interest. It also prohibits SUNY from accepting a cut of the interest students have to pay on those cards -- cards that the colleges let companies market on campus in the first place.

"One thing I've seen nationwide is companies giving schools more [money] if students borrow and carry a revolving balance," says Josh Frank, a senior researcher at the Center for Responsible Lending. "That seems to create an incentive for the school that's not in the best interests of their students."

Frank and other advocates welcome New York's reforms, but they sound a sobering note as well: Outside of the SUNY campuses, it's still open season on students, since no other state or federal laws prevent card issuers from doing all the questionable and behind-the-scenes activities described above. Ed Mierzwinski, consumer program director for watchdog group U.S. PIRG, told us that while the SUNY reforms meet the on-campus goals for student protections advocated by PIRG in a recent report the group issued, there's still a good deal of work to be done by either the Federal Reserve or the not-yet-created Consumer Finance Protection Bureau to protect students at other schools.

WalletPop asked the CRL's Frank for some advice for the millions of students who aren't getting their degree at one of the SUNY campuses. How should they be protecting themselves from collusion between colleges and card companies to part them from their hard-earned dollars?

"In general, cards that heavily market to you might not be the best cards for you," Frank advises. Since most of the industry's marketing is done by a fairly small number of very large issuers, do some legwork to find the ones that aren't bombarding you with ads, because chances are, they're the ones who'll give you a better deal, Frank says. Check with local banks or credit unions if you're looking for a credit card, and be a little cynical: Don't assume your school is peddling what's best for you, because they're probably not.

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