Student and consumer advocates saw victory this week in both the Illinois General Assembly and Congress as bills to limit credit card marketing to students and stop companies from issuing students more credit than they can pay off advanced.  The Illinois General Assembly passed a new bill on Friday to limit offerings from credit card companies when marketing to students. The Credit Card Marketing Act prohibits these companies from giving away food, merchandise and coupons on campuses in the state. The bill now goes to Gov. Pat Quinn to sign.

In D.C., the Senate and later the House passed a bill to limit interest rates and fees, and prevent credit card companies from issuing students under 21 cards without a co-signer or proof of financial independence. The Credit Card Act of 2009, now headed for President Obama’s desk also limits preapproved offers to young consumers and prohibits credit limit increases unless a person who is jointly liable approves it in writing. 
Critics of the Credit Card Act, led by the card companies, argue that the bill will limit students access to credit, and hence ability to pay for college.  According to a study by Sallie Mae, students are turning to credit cards to cover college costs that loans and financial aid packages do not cover. Their study showed that one-third of students now pay tuition with credit cards. 
Student organizations, including the Student Public Interest Research Group counter that companies had been issuing credit irresponsibly.  “Nobody’s intent was to prevent students from getting cards,” said Ed Mierzwinski, an advocate with PIRG.  “I think the banks are using [that argument] as their whipping boy.”  The group’s own research suggests credit card debt has become a problem for college students, and it gets worse as they progress. College seniors who were responsible for paying their own credit card bills reported debts of $2,623 in 2007, compared with $1,301 for freshmen, according to PIRG’s “Campus Credit Card Trap Report.”

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