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N.J. Proposal Would Limit Student Credit Card Freebies

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In an effort to help younger consumers avoid the pitfalls that can typically come with using a credit card, particularly for the first time, lawmakers in Florida will soon pass a bill that bans certain types of solicitation.

A bill in New Jersey that eliminates the ability of credit card lenders to offer free items such as T-shirts, blankets or other products on college campuses in the state now awaits the signature of Gov. Chris Christie, according to a report from the Verona, New Jersey, version of the local news site Patch. The would-be law passed the state senate unanimously in December.

“You have low promise sales at six or seven percent and then after a period of time it goes up automatically,” state Sen. Kevin O’Toole, who introduced the bill, told the newspaper. “I’m troubled that they are depending upon a certain population that is perceived of being vulnerable, having trouble making ends meet.”

Specifically, the measure will only ban marketing of this type at public colleges — private schools are still free to allow marketers if they so choose, the report said. This includes prohibiting marketing either in person or with unmanned displays.

Experts in both the academic and financial worlds say the move could be a boon to students because it will better help them avoid the costly debt that can come from borrowing on credit cards without first having an experience in dealing with with credit, the report said. Montclair State University provost and vice president for academic affairs Willard Gingerich, whose school banned credit card companies from campus in the 1990s, said that these kinds of offers draw in college students who may not be ready to deal with such a financial responsibility.

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There are already numerous protections in place for those under the age of 21 as it relates to avoiding credit card debt, including a provision of the Credit Card Accountability, Responsibility and Disclosure Act that mandates they either have an adult co-signer on any account they open or otherwise provide evidence that they can afford to make all necessary payments into the account by themselves. Today, the average college student graduates with tens of thousands of dollars in debt spread across student loans, credit cards and auto financing, among other types of credit, which can delay the point at which they can become financially independent.

Image: Ed Yourdon, via Flickr

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