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[Friday, August 15, 2008]
Student Credit Cards "Hustle" through College Doors
Why is it so easy to start up credit history at college? Why are non-graduates not as lucky as youngsters with great job prospects and salaries? Financial giants such as Bank of America, Citibank and Discover realize college students promise a profitable customer base and it makes them take action towards marketing school-branded credit cards onto the campus.
Students are hardly ever denied in their credit applications because they are treated as creditworthy, desired customers, barely they go through a college door. T-shirts giveaways, phone campaigns and in-store promotions are just a few short and easy ways to profitable credit lines for the young.
College students are a source of revenue for not only credit companies but also for Universities they study at. Playing the same game as self-profit banks, Universities and their alumni associations help grads build up credit with some of the most outstanding credit benefits, like unbelievably low interest, no annual fees and fabulous rewards. At least they put it this way.
Not that Universities profit from predatory policies, but state public disclosure laws revealed troubling confidential contracts between companies and major schools. According to these contracts, Universities are paid for selling students' information to banks and allowing them to market their products at campus. Universities receive even larger payments if they encourage their students to use plastic cards whenever possible.
With such persistent promotional campaigns waged by both banks and schools, young people sign up for deals with no big choice to make. The credit card features may not be as beneficial as they would be if a person applied for a student card online. But the countless websites take a long time to search through and lots of students make perfectly well with what's offered to them at campus.
Whether getting a credit card through a promotional campaign at University is less safe than applying online and contributes more to a grad's debt is still a question. But one thing it true, building up credit with student cards is faster and enjoyable.
Personal designs, favorable terms and rates, specially tailored perks, as well as bank's instant approval enable students to combine business with pleasure while financing their everyday school expenses and entertainment.
But all this convenience and affordability of building up credit at college are still raising doubts among financial experts and major part of past years' graduates.
Not all young people know that the so tempting 0% APR will soon jump up to 19.55% even if no late or missed payment is done. Do all would-be cardholders know what an introductory APR is? What about fixed or variable rates? It is also underrated that the numerous types of fees may fee a student out of existence.
It's a different thing with online credit card applications. Finding the proper website with easy-to-read comparison tables, a student can choose a card that best meets his/her likings and paying resources.
At universities they often decide for young people, promoting deals that will bring most profit for banks and the school funds. It was revealed that University signs a contract and sells access to students' personal files to a card company that pays them more.
Is this a team approach to building up credit or a two-way deal between banks and major schools? Until it's made clear, experts advise college students to use online resources for their fist credit card.
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