Watching out for scams

The Associated Students of Portland State University (ASPSU) in partnership with the Portland State University chapter of the Oregon State Public Interest Research Group (OSPIRG) held a press conference on Wednesday, Oct. 3 in front of Smith Memorial Center to inform students about the dangers of credit card debt.

A recent survey conducted by OSPIRG on college campuses throughout Oregon discovered that many students were being targeted by credit card marketers who used misleading festival-like atmospheres, offering prizes for completing as many as six applications at once. At PSU in particular, students were encouraged to fill out multiple applications in exchange for free gifts ranging from T-shirts to sunglasses.

“…Credit card vendors prey on students with giveaway offers and misleading applications … The student government of Portland State University will be working to regulate credit card vendors on our campus until this problem is solved,” ASPSU Vice President Emily Garrick stated in a written statement to the media.

Credit is offered to individuals based on various criteria, which includes aspects such as verifiable income and a good history of repayment. These criteria are important for individuals who wish to rent an apartment or finance a home, car or business.

OSPIRG stated in an information packet released to the public that “under regular credit criteria, many students would not qualify for a credit card because they have no credit history and little or no income.”

Yet, credit card marketers, who are often paid by their issuing companies on a per-application basis, still target college students around the country.

Students often buy into the application frenzy due in part to their low or non-existent incomes, ignorance of how to handle their finances, and pressures to pay off tuition and fees that financial aid does not cover.

The OSPIRG study also discovered that most marketers were not trained to answer questions pertaining to why students had to fill out applications immediately without the ability to read them in detail. In addition, most marketers did not disclose to students what the credit card companies were planning to do with their personal information. This information includes social security numbers, addresses and phone numbers.

“We’re just trying to help make students aware of the dangers of on-campus credit card marketers,” OSPIRG leader Cara Kaser said.

Kaser encourages students to educate themselves about how credit works before applying for a credit card.

Applicants should understand terms such as annual percentage rate (APR) – which refers to the percentage of interest you pay for the entire year, because some cards offer rates as low as seven percent and as high as 30 percent.

Students who currently have or want to apply for credit cards can stay out of debt by following simple routines including: creating a monthly budget and sticking with it, limiting cards owned to one or two, keeping credit limits under $500, and paying off the entire bill or as much as possible each month.

OSPIRG informs students that there are 10 traps to look out for including: excessive late fees, high over-the-limit fees, hidden transaction fees, punitive annual percentage rate (APR) increases, declining grace periods, introductory APRs, low minimum payments, “fixed” APR, “bait and switch” credit card offers and tiered pricing.

After reviewing research by groups such as the national Public Interest Research Group (PIRG), the state of California recently adopted a law regulating credit card marketers in several areas.

The new law prohibits offering free gifts to students who apply for a credit card, and calls for providing mandatory debt education in college and university orientations, as well as requiring credit card vendors to register with the administration of each college and university they solicit. The legislation seeks to limit the number and location of table sites and require marketers to answer all questions thoroughly, disclosing any and all potential uses of the student information collected.

For more information on credit issues and debt relief options, visit truthaboutcredit.org, or contact Steve Dixon, OSPIRG Consumer Associate at 503-231-4181, extension 314.