Helping Students


“Instant Approval” when Students Do Not Meet the Credit Critical

December 23, 2007 | Category: Credit Cards 
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Everyone knows that smoking is cool. Oh, especially when actors do it on TV. It just looks so sexy, so sophisticated—it’s hard to imagine these suave characters hacking up blood as their lungs cave in.

Sure enough, though, long-term smoking kills. And the best way to get addicted is by starting young.

It kind of reminds me of credit card companies—in particular, the ones that target college students. They, too, are hawking a sexy product; apart from the mysterious charm of an afternoon cigarette, I can’t think of anything more glamorous than thousands of dollars of credit for nothing.

And credit card companies are well aware of this. They know how irresistible free money can be. That’s why, in recent years, they’ve done quite well reeling in college kids with offers of credit that would make anyone’s jaw drop.

Instant approval, 0% APR, $3,000 credit limit—it’s amazing. And it’s a little bit strange, too. After all, college kids are among the least likely candidates for credit, yet they’re one of the only groups receiving such incredible offers. While members of nearly every other age group have to jump through hoops to get this kind of approval, college kids get carte blanche.

That’s right: college kids. You and all your friends. The ones who have absolutely no credit history, who’ve probably never paid a bill, who can hardly prepare a plate of spaghetti— you’re the ones getting instant approval? What’s that all about?

The answer is simple, actually: brand loyalty. According to Rockhurst University’s College Chalkboard , the trend of targeting youth began in the latter part of the 1980’s, when Mastercard found out that three quarters of student credit card holders would still have the same card 15 years later.

Other companies quickly jumped on board, bringing us up to now when the latest Nellie Mae credit card study shows that a whopping 76% of undergraduates owned credit cards in 2004.

Much in the same way that tobacco companies target the young, credit card companies are bent on fostering a relationship with kids. And considering that the estimated spending power of this group is at about $100 billion (see College Chalkboard ), it doesn’t hurt credit card companies to devote a little more attention to the students.

Written by:
William Sherman

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