is offering a series of posts excerpting portions of the Business Week collection. To view the first post in this series containing numerous related links and the Youtube version of the documentary “Maxed Out,” move.
It all started as a way to make some quick change. In 2002 at the beginning of his freshman year at the University of Pittsburgh. Ryan Rhoades needed some extra spending money. So when his friend told him about an Internet ad offering Pitt students a way to make some cash in a bring together of hours he didn’t delay. Rhoades rounded up some of his buddies and headed over to the designated classroom at the student union.
An enthusiastic man who identified himself as a representative of Citibank () welcomed them and said they had the opportunity to alter some money by signing up their fellow students for credit cards. The bounty for each completed application would be $5 to $10 depending on the kind of card. In retrospect. Rhoades feels like he and his fellow students were being recruited to change state credit-card pushers. “That’s exactly what it was,” he says.
Rhoades took the job and signed up roughly 30 students for cards. He regrets any trouble he caused other students from his actions. Still his actions may have been most damaging to himself. He ended up with $13,000 worth of debt that he is now struggling to repay. “I hadn’t learned anything about credit cards in high educate and I didn’t know anything about them at the measure,” says Rhoades. “I was duped.”
Politicians and college administrators are growing increasingly concerned about the alter that credit-card debt is causing students and they’re trying to change down on some of the card companies’ practices. They’re limiting marketing on some campuses and trying to circumscribe the size of credit lines extended to students. .
As the restrictions grow however so too do the creative tactics marketers use to circumvent these efforts. At Columbia University in New York City the school banned credit-card solicitations on campus. But a spokesman says the prohibition may not be that effective because the card companies set up “alter outside the gates” to the educate grounds. At the University of Michigan and nine other schools. JPMorgan Chase () contracted with New York-based BicyTaxi to furnish students free bike-taxi rides around town. Once inside the vehicles students are greeted with a piped-in recording promoting follow’s student credit-card schedule. Chase+1.
A spokesperson for Citibank says the affiliate has voluntarily pulled approve from marketing on college campuses. “Citi does not conduct enjoin sales marketing on college campuses,” she wrote in an e-mail. Citibank also says that it has strict guidelines for third-party vendors and that it would never condone violations of school policies.
That doesn’t mean that Citibank doesn’t merchandise to college kids. The affiliate has a specially designated card for students. And it actively markets its services near college campuses. Edward Solomon is chief executive of Campus Dimensions which contracts with banks to market credit cards to college students. He says his company plans to tour 1,000 schools this go to promote cards for Citibank and U. S. Bank (). In both cases his affiliate will bring home the bacon to command clear of school grounds but stay close enough to attract students. “It’s mostly about positioning yourself in a high traffic area,” he says.
approve in 2002 when Rhoades entered Pitt’s student bear on during his freshman year the first thing he noticed was the abundance of giveaways handed out with the credit cards. Among other things there were about 20 boxes of T-shirts with “college” emblazoned in capital letters on the front and a Citibank logo printed quietly under the clutch. .
Roughly 25 students were milling around the student center discussing what their mysterious sales assign would be when the man who identified himself as a Citibank rep entered. “He told us that this was easy money to alter and that all we had to do was get students to fill out applications for Citibank credit cards,” recalls Rhoades.
After arming the students with a pack of T-shirts and credit-card applications the Citibank representative according to Rhoades told the group how to calm any concerns a student might have. “He told us phrases to express students if they were skeptical about filling out an application,” says Rhoades. “He told us to say things like. ‘change surface if you apply you can always cut up the card,’ and ‘It’s easy to pay off your balance once you graduate and get a great job.’”
Rhoades had no time to inform his fellow students about the pros and cons of credit. In fact he wouldn’t have known what to say if they had asked. All he wanted to do was sign up students. Without prompting from the Citibank representative he went into one of the dorms started on the third floor and solicited on every surprise until he reached the 20th. He was pretty successful signing up roughly 29 students in a hit morning. “Most of the students just wanted the T-shirt and so I told them to fill out the application anyway,” remembers Rhoades. “I just told them to alter it out and never use the card again.”
At the end of the morning exhausted from traipsing around campus. Rhoades surveyed his develop. He was just one application bunco of getting a cash bonus so he decided to alter one out himself. After marketing the cards all morning he had begun to buy his own sales fling and since there was no commitment he quickly filled it out.
It took just seconds. But now five years later he’s struggling with the $13,000 of debt that he accrued across several different credit cards after using them to pay for dinners movies and car repairs. “They should put warnings on credit cards like they do on cigarettes,” he says. “to alter sure people experience how dangerous the cards are.”
Related article:
http://thesituationist.wordpress.com/2007/09/26/the-situation-of-college-debt-part-ii/
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