From ski passes and iPods to Visa gift cards and scholarships, financial institutions in Colorado are raising the stakes used to woo college students.
They have always offered tokens of their appreciation to new student customers, things like T-shirts and coffee mugs. But iPods can cost $200 or more, and ski passes cost about $300.
“Students are important to us,” explained Cristie Drumm, a Wells Fargo spokeswoman. “By developing solid relationships with them now, we hope to help them build healthy financial habits that will serve them well over their lifetime.”
Bank research shows that students who open new accounts often stay loyal long after graduation. Even if they don’t, their credit card debt – and the interest it accrues – often lingers.
“The credit card is where (banks) make the majority of their money,” said Larry Martin, president of Banking Strategies LLC in Denver, a bank consulting firm.
To entice the 18-25 crowd this fall, Wells Fargo held events at Arapahoe Community College, the Auraria Campus, Denver University, Johnson & Wales, and Red Rocks Community College. It offered new customers a two-for-one Rocky Mountain Super Pass at Copper Mountain and Winter Park, along with music downloads, a music festival sweepstakes and an online financial literacy game.
KeyBank gave free iPod shuffles to college students who signed up for a checking account, credit card and online banking package. FirstBank of Colorado handed out $10 iTunes music cards to every student who referred a friend.
TCF handed out Frisbees, magnets, stress balls and pins at Regis University, the University of Denver and Red Rocks Community College, and is giving new checking account holders $75 Visa gift cards.
“The 18-34 age group is such a huge demographic for us,” said Dave Alleman, assistant vice president of marketing for TCF in Colorado. “It’s the back-to-school crowd and so many new folks going to college or making new financial decisions.”
Elevations Credit Union mounted its own anti-swag promotion, challenging University of Colorado at Boulder students to bypass T-shirts and Frisbees for the chance to enter a $5,000 scholarship sweepstake when they open a new Buff One Account.
Elevations also teaches classes in financial savvy during the first few weeks of school, when as many as 45 percent of all new CU students, or up to 2,000 new customers, open credit union accounts, said Rich Jones, vice president of marketing.
Some 78 percent of college freshmen already have at least one credit card, and close to 20 percent have two or more, according to a 2000 study done by the college loan agency Nellie Mae.
“What we see is students graduating with literally $10,000 of credit card debt on top of their student debt,” Jones said. “We spend a lot of time and resources on educating them.”
Several schools have banned credit-card marketing on their campuses. CU-Boulder, for example, does not allow it in the student-run student union, the medical center or the health club, said Carlos Garcia, student union director.
During registration weeks, Chase, U.S. Bank and Wells Fargo were allowed to set up promotional tables at the student union for other financial services, however.
“We don’t allow direct credit-card solicitation on campus,” Garcia said. “Once they have students sign up for an account, if they want to mail them something, they can.”
