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Bill Banning College Credit Card Solicitation Awaits Christie Signature

Proposal by state Sen. Kevin O’Toole would prohibit credit card companies from using merchandising to entice college students to sign up for cards.

Credit card companies may no longer be able to entice college students with free gifts for agreeing to sign up for a credit card under a measure proposed by state Sen. Kevin O’Toole (R-40) that is currently awaiting Gov. Chris Christie’s signature.

The legislation, which would ban credit card companies from soliciting students with free gifts like t-shirts, blankets or vouchers on public college campuses, was unanimously passed by the state Senate last month.

“You have low promise sales at six or seven percent and then after a period of time it goes up automatically,” said O'Toole. “I'm troubled that they are depending upon a certain population that is perceived of being vulnerable, having trouble making ends meet.”

O'Toole said he is worried about a “bait and switch” where credit card companies offer free items or other incentives.

“They lure you in and won't disclose all of the pertinent facts, that within six months it goes up to 23 or 24 percent,” he said. “I think that’s unfair and borderline deceptive.”

Montclair State University Provost and Vice President for Academic Affairs Willard Gingerich said he “vehemently supports” the legislation, adding the university banned creditors from visiting the campus in the late 90's.

“It placed students at risk of a bad credit foundation,” he said. “We saw it as creating a situation where our students would be put in debt that they cannot meet because they are full-time students.” 

“Students are going to build enough debt from their education and additional debt is just not good common sense,” he said.

“Credit card debt and student loan debt are rampant issues in our society,” said O’Toole. “Credit card companies often use merchandise displays offering free sports t-shirts or blankets to attract young people.”

“This tactic leads young people to open accounts they cannot keep solvent, which can bury them in debt caused by unsuspectingly high interest rates,” he said.

According to a release from O’Toole, the measure prohibits a state public college from “entering into an agreement, or permitting its agents or a student organization from entering into any agreement, for the purposes of the direct merchandising of credit cards in person or by displays to students.”

“We must reduce the temptation for students to accumulate large debts at such young ages, to improve their chances of achieving the American Dream,” said O’Toole.

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