—The Daily Collegian Tuesday, Sept. 5,1989
New credit card law
to encourage caution
By KRISTIE BAUMGARTNER
Collegian Staff Writer
Credit card companies now have to
inform potential customers of their
interest rates and monthly fees,
enabling new student customers to
comparison shop.
Consumer advocates hope the rule,
approved by the Federal Reserve
Board in April and put into affect last
week, will encourage customers to
exercise caution and not be lured by
useless perks, said Gem Detweiler,
education director for Bankcard Hold
ers of America.
"Consumers will be armed with
more information and have the oppor
tunity to comparison shop," said Rob
ert McKinley, editor of RAM
Research's Bankcard Update, a Fred
erick, Md. newsletter concerning the
industry's activity.
Previously, a card's costs did not
have to be disclosed until it arrived in
the mail.
College students provide a great
market for credit card companies and
they have been aggressively pursued
by Master Card and Visa, Detweiler
said.
"Banks want to capitalize on student
loyalty so when they get out of school
and have greater income they will con
tinue banking there," McKinley said.
"There has been more solicitation on
campuses because the credit card
market is already saturated."
PENNSTATE
g Continuing Education
State College Service Area
serving Centre, Juniata, and Mifflin counties
s Ai n Review ..................
Course .............,....
for high school juniors and seniors
Thursdays, September 21—November 2
(6:00-9:00 p.m.)
For more information: (814) 865-3443
Penn State is an affirmative adion, equal opportunity. in.kWersity. S75Lb
There are 107 million credit card
holders in the United States.
"It is very important for college stu
dents to establish credit because they
may have difficulty getting a credit
card when they get out of school," Det
weiler said.
Students seeking credit must be
forewarned of credit card entice
ments, such as frequent flyer miles or
travel plans, she said.
Keith Dando (sophomore-engi
neering) said American Express con
vinced him to apply for a charge card
when the company offered two plane
tickets for ;99 to anywhere in the con
tinental United States.
Dando said he was disappointed
when he read the vouchers fine print
and realized they were highly restrict
ed.
"A lot of perks are overrated," he
said.
The standard interest rate for major
credit cards such as Master Card,
Visa, and Discover is 18.5 percent and
the standard yearly fee is $2O.
"I pay 19.8 percent interest," said
Alex Tirion ( junior -economics) while
studying last week outside Willard
Building. "I looked at some different
credit cards, but went with a reputable
bank."
Credit card interest rate disclosure
has been an issue for quite some time,
Detweiler said.
Credit card rates became a political
topic in the early 1980 s when short
term interest rates soared above
/ I ,'‘
20 percent. Consumer groups sought Consumer groups said students than necessary, McKinley said.
disclosure rules and federal rate caps should be aware of the potential pit- McKinley offered tips to potential
on the rates, but made little headway falls of owning a credit card. And Det- customers:
until they dropped their demand for weiler warned students to pay ■Be wary of mail or telephone
caps. minimum monthly payments on time credit card solicitations.
"The (new) regulation is a watered- so they will establish a good credit rat
down form of a bill that would have ing.
established a cap on interest rates," If the parents of a student co-sign for al needs
Detweiler said. the credit card and the student is delin-
The strength of the banking lobby in quent on payments, the parent's credit ■ Know a good bargain when you
Congress overpowered the consumer rating is affected adversely, she said. find one. A good interest rate is
lobby and managed to weaken the bill Some of the biggest problems students 18.2 percent and a typical yearly fee
to include only a full disclosure clause, have is they charge purchases more is 817.
GRADUATE
STUDENT
ASSOC.
MDLY MEETING
sdoy, Sept. 5
7:15 p.m. 101 Kern
Come Voice Your Concerns With
Your Student Leoders
ALL GRAD STUDENTS ARE WELCOME!
50 percent
of Penn State students use a Collegian
coupon once a week.
Track your results. It's easy when you advertise money-saving coupons in
The Daily Collegian. We're turning out a whole new generation of coupon
clippers; readers who "shop the coupons" before making spending
decisions.
With students spending more than $3 million per month on fast food,
entertainment, impulse shopping and groceries, competition for their
business is fierce. Whether you're delivering pizza or selling fine clothing,
coupon advertising in The Daily Collegian is a great way to see your business
grow!
73 percent of students use Collegian coupons each month, establishing
The Daily Collegian as the primary source of coupons clipped and used by
the Penn State population.
(Source: The Blue Chip Group, Tequesta, FL, 1988)
■ Find a card that fits your person-
THE PUERTO RICAN STUDENT
ASSOCIATION
Invites you to our first
General Meeting Fall 'B9
Wednesday, Sept 6
7:30 pm 269 Willard
Refreshments will be served
DON'T MISS IT!
Fire destroys
kitchen at
restaurant
About 40 Alpha Fire Company fire
fighters extinguished a blaze Friday
afternoon that destroyed the kitchen
ceiling of Fanny's Restauraunt and
Tavern near Toftrees Hotel, Resort and
Conference Center. No one was injured.
There were several patrons in the res
tauraunt, at 825 Cricklewood Drive,
when the fire broke out at about 3:45
p.m., said Assistant Alpha Fire Chief
Richard Harris. He had no damage esti
mate.
"It appeared as though the extin
guisher nozzle over the broiler didn't
work," Harris said. "The fire was pre
tty much confined to the ceiling of the
kitchen."
Paul Hamilton, a cook at the restau
taunt, said an employee was unable to
extinguish the blaze on the broiler with
a fire extinguisher and then decided to
call the fire department.
Hamilton said the restauraunt's broil
er has caught fire several times in the
past.
by Dave Howland
Correction
The Friday edition of The Daily
Collegian incorrectly identified
Nicole Batts (senior-secondary
education) as the former president
of the Penn State chapter of the
National Association for the
Advancement of Colored People.
She has never held that position.