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Confessions of a credit card pusher
Old 10-05-2007, 08:05 AM   #1
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Confessions of a credit card pusher

I came across this article while surfing yesterday and thought it was an interesting read. I have been out of school for a few years now, but it still describes a pretty accurate picture of how large credit card companies operate on college campuses.

Thoughts? Comments?

taken from: Confessions of a credit card pusher - MSN Money
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Confessions of a credit card pusher

He gave away T-shirts and had a sales pitch designed to counter fellow students' reluctance. He bought into his own words -- and has bills to prove it.
By BusinessWeek

It all started as a way to make some quick cash. In 2002, at the beginning of his freshman year at the University of Pittsburgh, Ryan Rhoades needed some extra spending money.

So when his friend told him about an Internet ad offering Pitt students a way to make some cash in a couple of hours, he didn't hesitate. Rhoades rounded up some of his buddies and headed over to the designated classroom at the student union.

What he saw in that room offers a view of how creative credit card companies have become in marketing their services to college students.

An enthusiastic man who identified himself as a representative of Citibank welcomed them and said they had the opportunity to make some money by signing up their fellow students for credit cards. The bounty for each completed application would be $5 to $10, depending on the kind of card.

In retrospect, Rhoades feels like he and his fellow students were being recruited to become credit card pushers. "That's exactly what it was," he says.


Salesmen at the gates
Rhoades took the job and signed up roughly 30 students for cards. He regrets any trouble he caused other students from his actions.

Still, his actions may have been most damaging to himself. He ended up with $13,000 worth of debt that he is now struggling to repay.

"I hadn't learned anything about credit cards in high school, and I didn't know anything about them at the time," says Rhoades. "I was duped."

Politicians and college administrators are growing increasingly concerned about the damage that credit card debt is causing students, and they're trying to crack down on some of the card companies' practices. They're limiting marketing on some campuses and trying to restrict the size of credit lines extended to students. Earlier this year, state legislatures in Texas, Oklahoma and New York moved to clamp down on credit card marketing to college students.

As the restrictions grow, however, so too do the creative tactics marketers use to circumvent these efforts. At Columbia University in New York City, the school banned credit card solicitations on campus. But a spokesman says the prohibition may not be that effective because the card companies set up "right outside the gates" to the school grounds. At the University of Michigan and nine other schools, JPMorgan Chase contracted with BicyTaxi, a company based in New York, to offer students free bike-taxi rides around town. Once inside the vehicles, students are greeted with a piped-in recording promoting Chase's student credit card program, Chase+1.
Getting close to students


As for the University of Pittsburgh, the school had barred marketers from dormitories by 2002. But Rhoades, unaware of the restriction, marched right through the dorms to sign up his fellow students. He says he did so on his own, without discussing it with Citibank's representative. A university spokesman declined to comment for this story.

A spokeswoman for Citibank says the company has voluntarily pulled back from marketing on college campuses. She won't specify which year the company made the decision but says it no longer allows employees or any company it contracts with to solicit students on school grounds.

"Citi does not conduct direct sales marketing on college campuses," she wrote in an e-mail. Citibank also says that it has strict guidelines for third-party vendors and that it would never condone violations of school policies.

That doesn't mean that Citibank doesn't market to college kids. The company has a specially designated card for students. And it actively markets its services near college campuses. Edward Solomon is chief executive of Campus Dimensions, which contracts with banks to market credit cards to college students. He says his company plans to visit 1,000 schools this fall to promote cards for Citibank and U.S. Bank. In both cases, his company will work to steer clear of school grounds but stay close enough to attract students. "It's mostly about positioning yourself in a high-traffic area," he says.

Such moves have consumer advocates up in arms. They argue that the growing problems that college students are having with credit cards need to be addressed more aggressively. If banks such as Citibank are still marketing to youngsters despite the existing restrictions, then schools and politicians need to take tougher steps.

"Students are constantly under attack," says Linda Sherry, the director of national priorities for Consumer Action, a San Francisco consumer-education and advocacy group. "Despite colleges' best intentions, the companies just set up shop across the street."


Easy money
Back in 2002, when Rhoades entered Pitt's student center during his freshman year, the first thing he noticed was the abundance of giveaways handed out with the credit cards. Among other things, there were about 20 boxes of T-shirts with "college" emblazoned in capital letters on the front and a Citibank logo printed quietly under the collar.

"You know I recently saw someone wearing that shirt when I was in Vermont, and I thought, man, maybe that's another person who got a credit card because they wanted a free T-shirt," says Rhoades. "It made me mad."

Roughly 25 students were milling around the student center, discussing what their mysterious sales task would be, when the man who identified himself as a Citibank rep entered. "He told us that this was easy money to make and that all we had to do was get students to fill out applications for Citibank credit cards," recalls Rhoades.

After arming the students with a bundle of T-shirts and credit card applications, the Citibank representative, according to Rhoades, told the group how to assuage any concerns a student might have.

"He told us phrases to tell students if they were skeptical about filling out an application," says Rhoades. "He told us to say things like, 'Even if you apply, you can always cut up the card,' and 'It's easy to pay off your balance once you graduate and get a great job.'"


T-shirt temptation
Credit counselors argue these lures -- the promise of a job and the prospect of just using the card during emergencies -- while highly enticing for students, often don't pan out the way that marketers promise.

"If the credit card is in their wallet, many students will eventually use it," says Darryl Dahlheimer, program manager at LSS Financial Counseling Service on the University of Minnesota campus.

"I bet none of the students I gave cards to ever cut up the cards," Rhoades says. "That's what you tell yourself, but it's too tempting."

Campus Dimensions' Solomon believes students are much more informed and savvy than critics suggest. With every credit card application, Solomon tries to educate students about the various elements of the card, explaining interest rates, balance transfers and responsible credit usage. "We try to give students good information from a marketing standpoint, as well as realistic information," he says.

Rhoades had no time to teach his fellow students about the pros and cons of credit. In fact, he wouldn't have known what to say if they had asked. All he wanted to do was sign up students. Without prompting from the Citibank representative, he went into one of the dorms, started on the third floor and solicited on every floor until he reached the 20th. He was pretty successful, signing up roughly 29 students in a single morning.

"Most of the students just wanted the T-shirt, and so I told them to fill out the application anyway," remembers Rhoades. "I just told them to fill it out and never use the card again."


A warning needed
Rhoades remembers that even though the credit card application terms and conditions were listed in fine print, none of the students even glanced at them. His observation echoes a common criticism that students aren't educated about what they are signing when getting a credit card.

"Students are rarely given financial literacy training," notes Dahlheimer. "And access to cards in the absence of a warning is like giving car keys to someone who has never been taught to drive."

Rhoades recalls that the whole process was so fast that students had little time to glance at the application. "We were in a hurry to get people to sign up, and they just did it, as a favor or because they didn't care," he says.

At the end of the morning, exhausted from traipsing around campus, Rhoades surveyed his progress. He was just one application short of getting a cash bonus so he decided to fill one out himself. After marketing the cards all morning, he had begun to buy his own sales pitch, and since there was no commitment, he quickly filled it out.

It took just seconds. But now, five years later, he's struggling with the $13,000 of debt that he accrued across several different credit cards after using them to pay for dinners, movies and car repairs.


"They should put warnings on credit cards like they do on cigarettes," Rhoades says, "to make sure people know how dangerous the cards are."

This article was reported and written by Jessica Silver-Greenberg for BusinessWeek.com.

Published Oct. 2, 2007

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Old 10-06-2007, 11:12 AM   #2
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I agree that our schools are not teaching kids about personal finance or credit cards.

But putting warnings on cards isn't going to solve any problems. It certainly hasn't had an impact on reducing smoking.
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Old 10-06-2007, 12:55 PM   #3
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Bleh,

It is not the job of the government or the colleges to teach personal finance. This responsibility lies on the parents and the kids to learn for themselves. After someone hits 18 they are considered an adult and should act like one. If someone doesn't research and understand what they are signing it is completely there own fault.

Perfect example of, "Ignorance is bliss"
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Old 10-06-2007, 02:28 PM   #4
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It amazes me how victimized and dumb some people are about money.....if you spend more than you have, then you will end up with credit card debt! DUH.
I remember signing up for a credit card for the cool t-shirt in college....my father gave me the longest lecture of my life when that card came in the mail.....he kept saying that "If you cannot pay the bill in full every month...you
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Old 10-06-2007, 02:33 PM   #5
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whoops....cont:

HAVE NO RIGHT TO BUY IT ON YOUR CREDIT CARD!!!!"
I still remember that lecture......and i didn't listen for a few years....but thank god I did finally get back on track and paid it all off.
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Old 10-06-2007, 02:38 PM   #6
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Originally Posted by NinjaPigeon View Post
I agree that our schools are not teaching kids about personal finance or credit cards....

Oh, but they are!

I have a college aged kid. When he was 8 years old he got off the school bus and asked me what his SS number was. Imagine my surprise when I saw that he was filling out a credit card application that was printed on the back of the monthly school lunch menu. He had it all filled out and was ready to drop in the mail box - save for this little piece of info.

The menu was circulated by the school district and sent home with every kid and mine thought he was supposed to fill it out. he did on the bus to get a head start on his homework. The district had contracted their menu development and printing services to some megacorp in CA. That's the day I joined the PTA and met my next door neighbor who happened to be an attorney.

PO'd mom.
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Old 10-06-2007, 02:56 PM   #7
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He had it all filled out and was ready to drop in the mail box - save for this little piece of info.
That would've simplified things a lot. I had to co-sign for our kid's credit card because she's a minor, and I'm not sure how I'm going to get my name off the card when she's of age. She'll probably have to cut that one up and start somewhere else on her own.

But, hey, by that time she won't want me seeing her bar-hopping & hotel-shacking bills anyway.
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Old 10-06-2007, 03:26 PM   #8
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Originally Posted by citrine View Post
It amazes me how victimized and dumb some people are about money.....if you spend more than you have, then you will end up with credit card debt! DUH.
I remember signing up for a credit card for the cool t-shirt in college....my father gave me the longest lecture of my life when that card came in the mail.....he kept saying that "If you cannot pay the bill in full every month...you
It made it simple for me...My parents couldnt or wouldnt bail me out so I didnt get into one of these situations...My bet is that a lot of these folks that have problems are 1) overestimating their earning potential when they get out 2) know mom and dad will pay for it...
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Old 10-06-2007, 05:00 PM   #9
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Bleh,

It is not the job of the government or the colleges to teach personal finance. This responsibility lies on the parents and the kids to learn for themselves.
Many of those parents don't know anything either. It would be the blind leading the blind. And expecting a teenager to learn on their own is, how shall we say it, optimistic.
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Old 10-06-2007, 10:08 PM   #10
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Many of those parents don't know anything either. It would be the blind leading the blind. And expecting a teenager to learn on their own is, how shall we say it, optimistic.
Yet people are allowed to drive, vote, drink, etc. An individual is either considered an adult, with all the rights, privileges and responsibilities, or they are not. Simply because your parents are blind or you are a young adult is not an excuse.

Now would a high school checkbook balancing class be bad? Probably not but I don't expect it would help many people. All hope of delayed gratification has gone out the window
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Old 10-07-2007, 01:38 PM   #11
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I don't believe that people don't understand the cost of using credit cards - considering the added cost is on their monthly statements. These folks hope to get sympathy or bailed out if they claim ignorance. I taught my daughter about the dangers of relying on credit cards, but she continues to subsidize her lifestyle with them anyway.
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Old 10-08-2007, 09:45 AM   #12
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Interesting article.... I can remember being in my college dorm room one day.... and one of the hottest women I had ever seen asked if she could come into my room for a few minutes and talk to me. (So of course I refused.. ) Anyway she sits on my bed and then starts her credit card pitch. How about that for a high pressure credit card pusher? I must admit although I did not sign up for a credit card, I already had one, I was willing to offer almost anything so she might stay a bit longer... Hey... stop laughing!!! I was only 18 at the time!!!!
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Old 10-21-2007, 04:05 PM   #13
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I remember a lot of the guys in my dorm signed up for those credit cards. I just learned how to ignore their little sales pitches. It's amazing that people are lured into getting those cards for a t-shirt or a candy bar or a beach ball. Ugh! I got my first card at 22 (right before I graduated) only because I heard it can be tough to get a card if you are no longer a college student and don't have a solid income. Then if I ever used the card, I just paid it off in full each month.
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