College Crowd Still Targeted by Lenders

Card issuers are finding loopholes in a new law aimed at protecting college students from credit, according to a report by the Wall Street Journal.

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 prohibits credit card companies from offering students freebies in exchange for signing up for a new card. These issuers can still promote their product by giving away free stuff on or near college campuses or at college events – as long as they do not require students to apply for credit.

“Credit-card issuers are still going to make credit available to college students because they are some of the best candidates for credit,” Ruth Susswein, a deputy director at consumer advocate organization Consumer Action, told the Journal.

Some companies, like Wells Fargo and Discover, are targeting college students by mailing promotional materials to their parents, according to the report.

The college crowd is often targeted by credit card companies because of their tendency to carry high levels of debt and to fall behind on payments. Many are just establishing their credit history. The Credit CARD Act prohibits those under 21 from applying for credit unless they have a co-signer or sufficient income to manage debt.

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