In 2010, the Credit Card Accountability Responsibility and Disclosure Act prohibited credit card companies from soliciting students within 1,000 feet of college campuses. Before this act went into effect, it was common for credit card companies to send up tables around campus which gave away goodies like t-shirts, candy, or pizza for those who signed up for a card. Today, card companies have moved to social media sites, where the demographic is primarily in the 18 to 30 year old target age group. This is the same demographic credit card companies solicit, because they can turn this group into lifelong customers.
On social media sites, the card companies can’t entice a young adult with a t-shirt or Frisbee like they used to on college campuses, so they had to get a new approach to giving things away in exchange for a signature on a credit card application. Many card companies using social media offer cash incentives after you make your first purchase using your new credit card.
Better Credit Cards for College Students
The problem with credit cards and college students is the temptation to spend more than can be repaid easily. This sets a student up for financial struggles early in their adult lives – and many graduate colleges with tens of thousands of dollars in student loans to repay and thousands of dollars in credit card debt. The income they receive from their first jobs is rarely enough to make their payments comfortably while also paying for ongoing living expenses.
A better credit card for college students that will reduce their risks of getting in over their heads in debt is a secured credit card. They can make a fully refundable security deposit of $200 or so, which then becomes their line of credit and spending limit. Responsible use of this card will help the student establish a credit score, which will serve to help them after college; instead of getting into serious debt and having a damaged credit score.
Not all secured cards report to the credit bureaus, so you will want to make sure you choose one that does in order to benefit your credit history and begin establishing a good credit score.