Chase Card Services, a division of JPMorgan Chase, has pulled its +1 Student MasterCard, saying that the student credit card market is no longer a priority for the bank. However, Citi and Discover are still focusing on the student market.
Discontinuation of +1 Card
Chase is apparently no longer interested in the student credit card market, and it will halt marketing its only student-targeted credit card, the +1 card. According to Fox News, Chase spokeswoman Gail Hurdis said the bank is not focusing on college students at this time.
It’s surprising that Chase is giving up on this particular demographic, considering that students will eventually get jobs and easily become loyal credit card holders. This decision may have been triggered by the changes imposed on the industry by the Credit CARD Act of 2009, which restricts how creditors can interact with students.
Other Student-Targeted Cards
Other credit card issuers are not following in Chase’s lead, as they are still focused on the student credit card market. Research performed by the direct-mail marketing firm Synovate has actually shown an increased focus on this market, especially by Discover. Of all the offers Discovers sends out, 9% are student-targeted offers. Discover has two credit cards targeted to students, including the More card and the Discover Student Open Road card (offers have expired).
Capital One is also marketing to students, releasing the Journey Student Rewards Card in early 2011. The card offers students an additional 25% bonus on cash earned as a way to reward those who pay their bills on time each month. Additionally, the card comes with a low credit limit, at least initially, to help students build credit responsibly.
Shift of Interest Rates
Chase’s decision to pull the +1 card has indirectly led to an increase in average APRs on introductory credit card offers around the industry. The rate rose to 14.67% at the end of April, which is the first time it jumped since late February. Capital One’s Journey Student Rewards Card replaced the +1 card on the CreditCards.com database and skewed the data. While the APR range of the Chase card was 17.24% to 21.24%, the APR for the Capital One card is 19.8%. Since this is higher than the low range of the Chase card, the average APR has, in turn, been affected.