The days of small incentives and free gifts to college students who fill out credit card applications may be numbered. San Jose Assemblyman Joe Coto introduced “The College Student Credit Protection Act” on Feb. 5. If accepted, the bill would prevent credit card companies from taking unfair advantage of college students while protecting the parents of current card holders.

The bill would accomplish this by directing California public university campuses to disclose all credit card marketing arrangements with the banks and financial institutions on those campuses, according to a press release. The bill would also ban credit card companies from offering gifts to students in exchange for filling out a credit card application.

Legislative Aide Quan Nguyen said the legislation was introduced to strengthen preexisting university policies and to limit the amount of pressure that is put on students by credit card companies.

“Although many students are financially responsible?there are segments of the student population that are susceptible to the aggressive marketing tactics of credit card companies,” Nguyen said.

Nguyen said that support for the bill has been good thus far. Supporters include the American Federation of State, County and Municipal Employees, the California Postsecondary Education Commission and a few student organizations from UC Berkeley and CSU Fullerton.

He said that the bill claims have also been supported by a number of websites including the Nellie Mae website, which acts as the nation’s largest producer of student loans.

According to the Nellie Mae website, credit card companies are vicious predators.

“They’ll bait you with free T-shirts and music downloads and then attack your newfound hunger for independence as soon as you’re in college and far from your parents,” according to the website.

In 2004, more than 75 percent of college students nationwide had at least one credit card, according to the Nellie Mae website. Of that-number, the average graduate student incurs about $5,800 in credit card debt, nearly double that of the average undergraduate.

While no figures exist for Sacramento State students, Family and Consumer Science Associate Professor Jan Andersen said that credit card debt is a problem for a number of students, including those at Sac State. He said, however, that if used responsibly, a credit card can also be very beneficial.

“There is nothing inherently good or bad about having credit cards,” Andersen said. “The problem is that many people, students included, view credit as more income to spend? while forgetting that they have to pay back the debt with added interest and fees. People need to realize that when they use credit, they’re basically spending tomorrow’s income today.”

Sophomore child development major Melissa Martin said that college students and credit cards do not always make for a good combination.

“I know from the way I use my ATM card that I wouldn’t do well with a credit card,” Martin said. “It would be too easy to spend money that I don’t have.”

There are a number of things students must consider before getting a credit card, Andersen said.

“Students should shop around for the best interest rates and fees,” Andersen said. “(They should) look for cards with low interest rates, no annual fees, and a 20 to 25 day grace period.”

Students should also read the fine print before signing up and avoid cards that use the “two-cycle average daily balance” method of calculating the finance charge, Andersen said. He said that one credit card should be sufficient and that students should never have more than two cards.

Andersen said there are also a number of tips for students who are already dealing with credit card debt.

“If a student is in debt, they need to stop using their credit card immediately,” Andersen said. “It’s like giving first aid. You’ve got to stop the bleeding (before you can do) anything else.” He said that students should also contact each of his or her creditors and explain the situation. –

“Many creditors will work with individuals if they contact them early,” Andersen said. “The worst thing people can do is stop making payments and ignore creditors.”

Andersen said that developing a budget is a crucial part of not only getting out of debt, but not incurring any in the first place. Nguyen said that AB 262 is scheduled to be heard by the Assembly Higher Education Committee on April 17.

Ashley Evans can be reached at [email protected]