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Why are Credit Cards Still Being Issued to College Students?

Why are Credit Cards Still Being Issued to College Students?

Did you know that a new report reveals that credit card companies are targeting college students in a new effort to issue one billion (yes, that’s billion) microchip-enabled credit cards? And they’re trying to get all one billion issued by 2016. But it gets worse – it’s believed these new cards could leave users vulnerable to everything from payment fraud to electronic pick pocketing.

First, it is illegal, courtesy of the credit card industry overhaul, to target college students. And second, there are still a lot of security problems to work out in these new technological wonders – and yet they’re being pushed on the young consumers, who historically have problems keeping up with everything from their dorm schedule to their sports cars – and, of course, Mom and Dad’s credit cards.


The radio frequency identification (RFID) chips are already embedded in more than 200 million debit and credit cards that are in use. It allows consumers to pay for their purchases simply by “waving” their cards over a reader. Unfortunately, no one has figured out how to ensure thieves to steal not only the credit card information, but other personal, identifiable information as the cards are being waved around. Even if a thief isn’t able to flash his own reader as the customer is waving his card, the thief can easily wave his reader close to that consumer’s purse or wallet after the transaction; after all, he knows they have it – he’s just seen them use it.

And if you think it’s not that big of a deal, you should know it’s considered a “serious security flaw” in security circles. And yet, all of these students will soon have access to them and what’s worse – these students are being targeted. Even the newest cards are extremely vulnerable. The card companies continue to insist that even if information is stolen, there’s no way it can be un-encrypted. Unfortunately, that’s been proven wrong in countless tests.

RFID Demonstrations

One security analyst sent his own demonstrations to one of the companies designing the chips that also insist their technology is safe. A company spokesperson who saw the video was surprised,

This demonstration of electronic pickpocketing was both shocking and eye-opening to us, as well as to the credit card executive we interviewed and shared the demonstration footage with,

said ProSieben producer Carolin Conrady.

Truth in reporting is always enlightening and we can assure our audience that electronic pickpocketing is a very real threat.

Giving students a free T-shirt to sign up for an RFID-enabled credit card on their way to class may be an effective marketing tactic for credit card companies on college campuses, but when we’re talking about young men and women looking forward to making their way in the world, knowingly placing them at risk of identity theft and payment fraud should have everyone with a stake in the future of this country mortified,

said the analyst.

The growing threat of electronic pickpocketing made possible by the issuance of RFID-enabled credit cards has prompted numerous state and federal law enforcement agencies, including the U.S. Marshals Service, Financial Surveillance Unit, and anti-fraud task forces, to reach out for help in identifying and combating the risks.

Why College Students

The real question, however, is why college students are being targeted. Under the new rules, before obtaining a credit card, people under the age of 21 must have a cosigner, which usually falls to the parent, legal guardian or spouse. If they can’t don’t want to do that, they must prove an ability to pay the debt – something that’s going to be challenging for most college students considering the report that came out the same say that said student loan debt has reached a new record.

The new law is a great idea, especially to those who believe targeting college students can lead to nothing good, but there are still those who are on their own already – paying their own bills, out of the parents home, and sometimes with a family to support.

Those who would otherwise have well managed the credit…will be negatively impacted in their ability to build credit,

says Michael Rubin, a financial author. Not only that, but young people who behave less responsibly are probably “better off having no credit history than a bad one,” he says. Still, the credit card companies still insist on issuing these one billion credit cards.

Facebook pages have been popping up, but there are concerns these young adults might not understand fully the repercussions of opposing these restrictions. And now, it looks as though they might not have much to worry about. There are many ways to bypass the laws – and that’s exactly what the credit card industry is banking on.

So what are your thoughts? Was the law useless to start with or are the credit card companies targeting the most vulnerable consumers?

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  1. Jack O. says: [25 Oct 2012 - 20:23 • ]

    I think this vulnerability in personal data will create a larger demand for identity theft protection insurance.

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