Unethical Credit Card Companies?

Posted by: Meredith K. | Nov 12,2007


Here’s an article about college credit card debt that I take some issue with.  One college student says, “’I was offered a pre-approved credit card even before I had a job. Credit card solicitors are very vague and don't point out the terms and conditions. It is unethical.’”  But is it really unethical?  

I’ve spent a fair amount of time here saying that credit card companies should be less aggressive about marketing to college students.  But it’s not as though credit card companies are lying outright.  That, indeed, would be outright.  It is unethical, perhaps, because it is a lie of omission.  They are not letting the students know about the terms and conditions of a particular card.  However, those terms and conditions are there in black and white, if the student just digs a little.  My point is that it’s a bit of a two-way street.  Yes, credit card companies are too aggressive and banking on freshman ignorance about credit cards.  But the information is there if students just took a little time to read exactly what they’re getting.  

Now I know that the terms and conditions on a credit card are increasingly complex.  What you might be saving in an APR you could be paying in a laundry list of fees that can be raised “at the discretion” of the credit card company.  At the same time, you can look at a lot of student credit card offers and see the terms pretty clearly: 19.99% APR after the introductory rate expires.  Trouble is, students don’t know exactly how bad this rate is, so it is slightly unethical for credit card companies to market to people who have little idea of what they’re doing.  But really, students, take ten minutes to read through a credit card offer, the onus is on you too.  

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