Avoid the Freshmen 15 Credit Cards

As college freshmen prepare to embark on their first year of higher education, there's one area that is often overlooked and poses a significant danger to their financial health: credit cards.

College campuses have become a prime target for credit-card companies and banks, which aggressively market their products at tables in high-traffic areas like student centers, libraries and stadiums during sports events. They offer free gifts like T-shirts, hats, Frisbees and other promotions for students who agree to fill out an application. 

Schools receive millions of dollars from card issuers for the privilege to set up such tables and sometimes sell students' personal information -- phone numbers, e-mail addresses and home addresses -- so companies can reach out to students beyond the campus as well. Some schools offer to constantly update those lists with new recruits and new contact information for added fees.

Colleges also enter agreements in which their colors, emblems and sports teams are featured on co-branded cards with the logo of MasterCard (MA), Visa (V)or a bank. This falsely implies that the school has evaluated the cards and considers their interest rates and other terms among the best, according to Benjamin Lawsky, deputy counselor and special assistant to the New York state attorney general, whose office is investigating lending practices on college campuses. 

Card issuers also team up with fraternities, sororities, student groups or pop icons to further create a comfort level with students. For instance, Citigroup's (C) mtvU Platinum card is co-branded with Viacom's (VIA) youth-oriented MTV network, and offers "VIP tickets" to spring break or the MTV Video Music Awards.