Credit Card Ads on Facebook

Posted by: Meredith K. | May 14,2008


I’d like to write a little bit more about something that was written about on the front page at EoC a couple of days ago.  Apparently, consumer rights groups are up in arms about Facebook credit card ads that are targeting the college demographic.  Given that college students spend more time online than they do in the commons – or wherever a credit card company might be setting up shop on campus – this is no small development.  

I’ve written before about how college administrations are selling students’ personal info (phone number, address, email address) to credit card marketers.  While the Facebook thing isn’t the fault of a college administration, it’s still part of the same fabric, and same problem.  Credit card companies are advertising to college students knowing full well that younger borrowers do not readily understand the terms of credit and can get very easily into debt trouble.  

Another way of saying that: students are a creditor’s dream.  One of the major misconceptions that students make is that they think credit card companies don’t want you to go into debt.  They want you to go into debt – and how.  They’re main concern is that you don’t default.  They even want you to pay the minimum because this means that you’ll be in debt for longer.  Anything that extends the amount of interest is good news.  Sounds pretty simple, but this is one of the many facets of credit card agreements that new cardholders may not understand.  

So credit card companies target young people with inaccurate, or downright deceitful, promises about credit – such as only having to make low monthly payments.  As I just mentioned, low monthly payments means higher interest.  So while it’s literally true that a student may only have to pay a little every month, this is actually against their best interests.  On Facebook, credit card companies are not accurately portraying the interest rate on a particular card.  Basically, it’s a case of false advertising – but laws governing the web haven’t quite caught up to print or TV ads.  

Another complaint about the Facebook ads is that they tout payday loans for college students.  These loans have a worse interest rate than even a cash advance on a credit card – which is really saying something.  But the ads are so enticing: “Get $1000 today!”  Yes, but you’ve got to pay it back in two weeks or else interest rates could go up even further.  Students just don’t think that far ahead.  My advice to anyone who sees these ads: don’t click em and do some comparison shopping on your own, like via our credit card directory, to get a better credit card deal for your credit rating and income bracket.  

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