Impact of Credit Card Legislation on Students

Peeling Back The Onion:

The Impact of Credit Card Legislation

On Students…And Their Parents

Peter [email protected]

• Stability

• Ability

• Willingness to Pay

And then there was Andrew Cuomo…

Student Credit Card Trends• Usage

• Balances

• Direct School Expenses

• Tuition Payments

• Knowledge of Balance

• Revolving a Balance

• Financial Illiteracy

“We basically

socialized the

bearing of the risk.

That’s why good

customers

sometimes have to

bear the cost of the

risk that others

pose.”

-- Ken Clayton, ABA

Key Provisions• Rate increases

• Existing balances

• Opt-In overlimit fees

• Universal default

• Payment allocation

What constitutes a

written application?

What’s a “tangible

item?” And why does

intangible sound like a

better deal anyway?

Where can we

actually market to

students?

The Law of Unintended Consequences

“If people are being

taken to the

cleaners, it’s

because Congress

sent them there.”

--Wall Street Journal

Sept. 2008:

$4.7 trillion in

open credit lines

October 2009:

$3.4 trillion in

open credit lines

1,000%

$38.5B vs. $20.5B

$8.7B vs. $4B