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Credit Card Companies Find Ways Around The Law
Restrictions concerning the credit card marketing to college students were performed as a part of the Credit Card Accountability, Responsibility and Disclosure Act provisions. Actually, the CARD Act is the law that is aimed to tame the ethically suspect practices provided by credit card companies which have actually managed to find ways around the rules.
In fact, the CARD Act is considered to be a concentrated effort performed by the legislators in order to restrict the practices of credit card companies which are referred by many people as ethical and to decline the amount of credit card debt that forces a number of people to apply for debt consolidation.
The Provisions Of CARD Act
One of the CARD Act provisions is aimed to forbid the heavy marketing to college student usually provided by the credit card issuing institutions and companies. However, according to the reports of Wall Street Journal, the agencies find ways back onto the campus. The law actually forbids any promotional gifts at no charge made to students, but it doesn’t prohibit credit card issuers to offer $50 bonus, for instance, for signing up for a card. Such practice is provided by the Citibank. Chase markets the students through Facebook offering “karma” reward points for befriending the Chase Facebook group.
The Laws Are Not Broken
Credit cards are issued not by the finance or credit card companied themselves, but mostly by banks which are not allowed to hand out promotional literature for credit cards, however, it is not forbidden to do so for savings and checking accounts. Although, a lot of people still consider such practices as canard. The recent research of college students made by the University of Houston Law Center noted that 73% of credit card marketing to college students wasn’t held on the campus, proving that most marketing practices performed by the financial services companies occur to be on the level. Moreover, the same research found out that 29% of college students used their student loan disbursement amounts applying for credit card in order to prove the income, the point required for being eligible for credit card.
The number of students going heavily into debt during the college today is increasing due to the high costs of education. The default rate on student loans is really high and credit card debts are making the situation even worse. The huge amounts owed by the college graduates can be lowered with the help of student loans consolidation performed by the debt relief companies.
