On-campus credit card marketers under fire

Students may own the most expensive T-shirt or water bottle on the CSUS campus and not even know it.

If they have accepted a gift from one of the credit card vendors on the quad in exchange for filling out a credit card application, the student may be paying for their “free” gift for months or years to come. Hidden fees and post-introductory interest rates on credit cards can quickly add up to hundreds of dollars, paid out over years.

“Initially, they look great,” said Louis Camera, director of Student Activities. “The caveat is that if you miss one payment, the interest is bumped up to 19 or 20 percent.”

To address credit card solicitation aimed at students at CSUS, ASI has organized an open forum from 6:30 to 8 p.m. tonight in the Redwood Room of the University Union.

“This forum is totally open,” said Sean Lumachi of the California State Student Association. “It will be low-key and kick-back so that students can just walk in and speak up.”

Based on the feedback from the forum, a recommendation will made at the Dec. 1 ASI board meeting.

“This is to see where students stand on the issue,” said Lumachi. “Then the final recommendation made to the ASI board will be informed and representative of students.”

Questions about whose responsibility it is to monitor such credit vendors, and even whether or not they should be allowed on campus, are a pressing topic at CSUS and nationally. There are several states which have recently banned credit card vendors entirely from soliciting student consumers on their campuses.

“This is an important issue,” said Lumachi. “Credit card companies need to be more responsible when selling their products to our students.”

In July, Sen. Joe Dunn introduced SB 796, which called on the UC, CSU, and community college systems in California to restrict credit solicitations on campuses. Though the bill died this legislative session, it will be reintroduced in the next two-year legislative session, according to Lumachi.

“The answer is not to keep credit cards off campus,” said Camera. “Credit cards are an inevitable way of handling finances. Using them responsibly is the important thing.”

In response to the concerns, ASI is examining the current policies at CSUS and exploring options to protect students from deceptive practices by vendors on campus.

One possible restriction would be to prohibit credit card solicitors on campus, and instead offer an ASI credit card which would have consistently low interest rates and fees, with revenue going to scholarships. This would be similar to the one offered to CSUS alumni by the Alumni Association.

Banning credit card sales on campus would eliminate a significant financial resource for campus organizations. A club can receive $50 to $100 for each day they represent the vendor on campus. Or, the representing group can receive a certain dollar amount for each completed application.

Other less severe restrictions would include requiring that companies disclose all their terms, typed in a readable font, and to make educational information available.

Currently, there are few restrictions in place for vendors who target students at CSUS. They must be represented by a campus club and be registered with Student Activities.

Camera regularly checks on the vendors set up in the quad. Recently he asked for identification and a copy of the approved form from a vendor. When the salesperson couldn’t produce any, he was asked to leave. Initially, he refused, until campus police were called.

“They just walk onto campus and set up,” said Lumachi. “They come onto campus illegally.”

Another danger of which students must be aware is that the personal information required by these companies is enough for identity theft. With a name and Social Security number, a deceptive enterprise can log onto the Internet and run up debt in the student’s name.

“Buyer beware. Understand what you are doing,” said Camera.

He also advised that students ask to see proof that the company is registered on campus. Additionally, a member of the representing group should accompany the solicitor.

“If they are a legitimate business, they’ll have a copy of an approved Request to Raise Funds form from student activities,” said Camera.