My first job as an aspiring marketing professional was working part-time in the marketing department at Bank of America while a student at USC. One of my duties was helping the student marketing program manager promote student credit cards across various four-year colleges through a small army of “Campus Representatives” hired by the bank to work the college crowd at various events and activities on- and off-campus.
The team signed up thousands of new customers every week. Long-term studies I’ve led over the years consistently show most of these once-students held on to their first credit card far longer than any subsequent card added to their wallet. In fact, I still have my first credit card, which started out as a student BankAmericard card more than (gulp) 30 years ago.
Student Card Marketing now focuses on Prepaid
Javelin Strategy & Research just released a new report on the prepaid market among college students. The study reminds me how important the student market is to the long term future of a financial institution, but only if they pull it off smartly.
According to the Javelin report, the CARD Act of 2009 “severely limited the once-pervasive trend of issuing credit cards to college students, and some issuers turned to prepaid cards to continue providing cards to college campuses.”
Once again, regulators are proposing new regulations for college cards that could dramatically alter payments for students.
Card issuers have always been focused on students because of the long-term ROI and low cost of acquisition. Bankers hope that they can retain these cardholders as they evolve into financially independent and increasingly affluent banking customers.
According to Javelin, today, 23% of students own a general-purpose reloadable (GPR) prepaid card and approximately 107 colleges offer a campus-specific prepaid card to students.
The new study examines the controversial regulatory environment for campus prepaid cards and recommends how issuers and universities can best manage potential regulation. The report also analyzes the unique financial needs of today’s college students and offers insight into how providers can best help young customers and build long-term financial relationships.