Obama's Day: Credit Cards and Congress

Good morning and welcome to The Oval. It's the 94th day of Barack Obama's presidency. It's also the anniversary of the birth and the death of William Shakespeare. Remember, when people talk about the "brave new world" of journalism -- or of anything else -- they're quoting the Shake Man.
Busy day for the president -- a meeting with credit card company officials, a heavy dose of congressional relations, and another sports team to honor.
At 11 a.m., the president is at the Capitol to speak at a Holocaust remembrance ceremony.
The credit card company meeting -- skedded for 1:15 p.m. -- could produce a tempest. The administration wants to crack down on what it considers too-high fees and predatory lending practices.
In the afternoon, congressional leaders from both parties visit the White House for a presidential sit-down. And tonight, Mr. and Mrs. Obama host a reception for members of Congress in the Blue Room.
Obama also meets privately today with Secretary of State Hillary Rodham Clinton. One topic, no doubt: The increasingly vulnerability of a nuclear-armed Pakistan to a takeover by the Taliban.
Obviously, there are always lots of meetings at the White House. Some are publicized and some are not -- and often the less publicized the meeting, the more sensitive the topic.
Our Gannett colleague Todd Spangler, who roots for the Pittsburgh Steelers even though he writes for the Detroit Free Press, spotlighted this chat between the Michigan congressional delegation and White House chief of staff Rahm Emanuel. The subject was one you'll be hearing a lot about in the coming weeks: The ailing car industry. (Talk about "to be or not to be.")
Obama also finds time today to pay tribute to the reigning college football champions from the University of Florida. No word on whether the president will do the Gator chomp.
In other news, the debate rages on about the next step in the CIA interrogations story. Members of Congress seem divided on whether to press for a full-blown investigation of Bush administration officials; others argue the interrogation program worked. Meanwhile, Democrats are already starting to celebrate Obama's first 100 days, even though the actual 100th day isn't until Wednesday.
We'll keep you posted on the president's day. Have a good one. And remember your Shakespeare: "We know what we are, but not what we may be."

Obama Goes After Credit Card Companies That Target Young People

While the economy struggles and job prospects look grim for new college graduates, the number of young people burdened by credit card debt is increasing.
According to a study commissioned by Sallie Mae researchers, the average undergraduate carries $3,173 of credit card debt -- the highest level since researchers started collecting data in 1998.
Although the economic crisis is inspiring some people to save more, many are turning to credit cards after losing a job or to pay the bills.
But such debt can grow, especially in a bad job environment, eventually affecting young peoples' quality of life and ability to rent an apartment or buy a car

Credit card companies spend billions of dollars marketing to young people through the Internet, television, phone and old-fashioned brochures in the mail offering pre-approval, low interest rates, and even "free money" if you sign up now.

They are especially aggressive on college campuses, buying lists of students from schools and entering into agreements that allow them to set up tables in front of dining areas and activity fairs.
"They were everywhere...like vultures: outside of my dorm, at football games and in the quad. I took their teddy bears, free pizza, tote bags and complicated, convoluted signup forms," Kali Dun, a University of Virginia student, told a congressional hearing on credit card abuses.
By her junior year, Dun had opened three credit cards, and had incurred nearly $3,000 in debt.
Along with the giveaways and incentives, she took also high fees, heavy interest rate burdens, and complex terms.
As a senior, Kali graduated with more than $5,000 in credit card debt.

Bill would limit many Credit Card offers

The Credit Card Accountability, Responsibility and Disclosure Act seeks to set standards for the entire credit card industry, but certain provisions apply directly to students. The bill requires parental approval and the signature of a parent, guardian or adult co-signer before issuing a card to anyone under age 21. The recipient will also have to take a financial literacy course before getting the card.
The bill would also prohibit pre-screened or pre-approved offers to those under 18, and would only allow offers to people aged 18 to 21 if the recipient has asked for the material.

Average student balance: $3,173
"Credit card companies are preying on the vulnerability of students with unfair terms, fine print and sky high interest rates," Schumer said in a conference call with reporters Wednesday. "By limiting wanton solicitation of students, more students will sign up for credit cards responsibly instead of impulsively signing on the bottom line in order to get a free T-shirt."
College students in upstate New York, Schumer said, carry $1.2 billion in credit card debt, $237 million of that held by Hudson Valley students.
The bill was approved last month by the U.S. Senate Banking Committee. The American Bankers Association and other industry groups are lobbying hard against the legislation, saying it would unfairly limit companies' ability to adjust their rates for riskier borrowers and would lead to less available credit and higher rates for everybody else.
A new study by student lender Sallie Mae found students used credit cards last year more than ever before, including for tuition.
Eighty-four percent of undergraduates had at least one credit card, up from 76 percent in 2004, while students have 4.6 credit cards on average. The average balance was $3,173.
Marist College banned credit card solicitations on campus about ten years ago.
"We felt as though they were really taking advantage of students without properly informing them about how to use credit, so it became like play money," said spokesman Tim Massie. "They would entice students with a Frisbee or a water bottle or a yo-yo and say, 'Hey, fill out this credit card offer,' and students can find themselves in over their heads, so we said enough."
clivermore@th-record.com