College students in New Jersey won’t be the target of credit card marketing on campus if a bill passed by the state senate last week is signed into law by Governor Chris Christie. The New Jersey bill would serve as reinforcement for provisions put forth by the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD Act).
The New Jersey legislation was sponsored by Senator Kevin O’Toole. It forbids any public higher education institution from allowing credit card companies to advertise on campus. Displays, giveaways, and any other form of direct marketing to students would be prohibited. The bill was unanimously approved by the Senate last week and is now before Senator Christie.
O’Toole brought the bill before the Senate in an attempt to keep college students from getting into debt before they even enter the workforce. “We must reduce the temptation for students to accumulate large debts at such young ages, to improve their chances of achieving the American Dream,” he said, citing offers of free T-shirts and blankets that credit card companies use to lure young applicants.
Credit CARD Act already put limitations in place
The Credit CARD Act, which went into effect in February 2010, prohibits credit card companies from giving away merchandise on college campuses or at college-sponsored events. In 2008, before the CARD Act, a study by United College Marketing Services showed that college students received an average of 25 to 50 credit card solicitations each semester.
The Act also says that credit card issuers may not approve cards for students between the ages of 18 and 21 unless they apply for the card first. Students must submit proof of income when applying. If they are issued a card, the limit cannot be more than either $500 or 20% of the student’s annual income. If they have more than one card, the total limit must be equal to or less than 30% of their income unless they have a co-signer over the age of 21.