Maxed out students need a fairer deal from banks

Tertiary students and bank staff are calling on banks to rethink their service to students in response to data that shows growing student reliance on credit cards and other bank debt.

The New Zealand Union of Students’ Associations (NZUSA) and bank workers’ union Finsec are joining forces to try and keep students out of high-interest debt. The amount students owe on credit cards has increased by 32% since 2004, according to the NZUSA Income and Expenditure Survey. Credit card debt has increased at a higher rate than low to no interest overdrafts.

“It’s Orientation season and the campuses are crawling with banks trying to attract student accounts,” said Paul Falloon, NZUSA Co-President. “We want banks to value their student customers by easing penalties for default payments and offering no interest overdrafts and loans as last resorts.”

“Balancing the books while studying is hard enough with high fees and so few being able to access a living allowance,” said Falloon. “We want banks to follow the government’s lead and ensure that students aren’t further punished by crippling market interest on their bank debts, especially after graduation.”

Finsec says that the student market is key for the banks and that the banks should adopt an ethical approach to student accounts. This would include low interest, low fee credit card options for students and other low income customers.

“Our Better Banks campaign is about banks offering quality service to customers and communities,” said Finsec Campaigns Director Andrew Campbell. “Better Banks for students will support them through their studies with no-interest packages and not load them up with credit card debt.”

Campbell said banks had an important role in making sure that student credit card debt does not continue to rise at such an alarming rate, and that the banks should investigate the reasons for the recent rise.

ENDS

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