States Where Credit Card Companies Spend the Most Marketing to Students

Having a strong credit score is a fundamental pillar of financial wellbeing. Making a major life purchase sometimes requires a loan or a line of credit, and in hard times, credit can be a bridge to help make ends meet. A good credit score can often help borrowers secure more favorable interest rates and terms, saving them money or hassle over time.

With the benefits that good credit can offer, it is important for young people to get started and learn to responsibly maintain lines of credit. Opening and managing a credit card is an excellent way to do so, and credit card issuers are often looking to market to the next generation of consumers. However, for many young adults  — especially those in college — gaining access to credit can be challenging.

Younger Borrowers Have Higher Delinquency Rates

One common risk for younger borrowers is that they fall into delinquency more frequently than their older counterparts. With lower incomes and less savings than older people who are more established in their careers, younger credit card users may have more difficulty repaying their balances. For most of the last 2 decades, borrowers aged 18 to 29 have had the highest share of credit card debt transitioning into delinquency of any age cohort. Delinquency among this group has grown from a low of 4.9% in mid-2021 to 8.3% in the first quarter of 2023.

The federal government introduced policies meant to provide new protections for consumers, including young borrowers, early in the Obama Administration. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 helped protect consumers from practices like excessive fees and unannounced interest rate hikes. For young people specifically, the law also made it so that consumers under the age of 21 require sufficient verified income or a co-signer before applying for a credit card. This can help ensure that young borrowers have the means to repay credit card debt, but it can also hinder those living off of student loans from valuable years of credit building.

College Credit Card Marketing Has Declined Significantly

One of the Credit CARD Act of 2009’s other protections for young borrowers was to place new limits on how credit card companies market to college students. For example, credit card companies were more restricted in their ability to mail card offers to students or to provide giveaways or other inducements for students to apply for a card. As a result of these changes and other factors, the amount of money spent on college credit card marketing has declined dramatically since the law passed. In 2009, card issuers spent $103.6 million on college marketing after adjusting for inflation. By 2021, that figure had fallen to just $19.8 million.

Alumni Associations Are Heavily Targeted by Credit Card Issuers

Despite a decline in college credit card marketing payments overall, card issuers continue to target alumni groups most heavily. Young people remain an important market for credit card companies and they can also benefit from access to credit in early adulthood. Alumni are also more likely to be above the age of 21 and not subject to some of the same marketing restrictions included in the Credit CARD Act. Nearly 75% of college credit card marketing payments were made to alumni associations, totaling $89.7 million from 2016 to 2020 (the latest years with available data).

Colleges and universities have been a willing partner in making these sorts of agreements. In exchange for providing access to alumni and others affiliated with the college and occasionally licensing university branding, colleges may receive fees and royalties from the credit card issuers with whom they have agreements. A total of 44 credit card issuers and 324 institutions of higher education participated in college marketing agreements from 2016 to 2020.

Issuers have targeted colleges and universities in some states more so than others to expand their marketing reach. California is home to several large and notable college institutions that collectively lead the nation with more than $15 million in credit card marketing payments received from issuers. And while other largely populated states rank highly, population isn’t the only indicator. States like Kansas, Indiana, Alabama, and Iowa all rank in the top 15 states for credit card marketing payments collected by colleges and are all home to universities with decorated sports programs.

While the total marketing spend can be a strong indicator of investment by credit card issuers, there are other important factors to consider. In Illinois, 7 different credit card issuers have marketing agreements with universities — the most of any state. Similarly, Pennsylvania is home to 32 different college institutions that have inked marketing pacts with credit card companies, which is over double the number of California colleges with similar agreements.

For a breakdown of the all U.S. states included in the analysis, here is the report’s complete data table:

Methodology

To determine the locations where credit card companies spend the most marketing to students, researchers at Upgraded Points analyzed data from the Consumer Financial Protection Bureau’s Credit CARD Act data. The researchers ranked states according to the total marketing payments made to college organizations by credit card issuers from 2016 to 2020. In the event of a tie, the state with the greater total new credit cards opened from college marketing agreements from 2016 to 2020 was ranked higher. Universities, alumni associations, and other university-affiliated institutions and foundations were considered college organizations for the purposes of this analysis.

Final Thoughts

Having a good credit score is crucial for financial stability. While managing a credit card is a great way for young consumers to build and maintain their credit, doing so can also present challenges. Cardholders aged 18 to 29 have lower incomes and less savings, putting them at greater risk of delinquency. 

The Credit CARD Act of 2009 aimed to protect consumers from high fees and sudden interest rate increases. And for borrowers under 21, the law requires sufficient income or a qualified cosigner to obtain a credit card. While helpful in ensuring a young borrower doesn’t take on debt they can’t repay, the law can also make credit building during one’s younger years more difficult.

Additionally, the Credit CARD Act changed how lenders could market credit cards to college students, such as limitations on mailing card offers, or offering bonuses and rewards for applying. Due to this and other factors, credit card companies’ marketing spend for college students dropped from $103.6 million in 2009 (inflation-adjusted) to $19.8 million in 2021.

Alumni groups — whose members are likely to be over 21 years of age and, therefore, not subject to as many marketing restrictions — remain heavily targeted by credit card issuers, making up nearly three quarters of college credit card marketing payments between 2016 and 2020. 

During that same period, 44 credit card issuers and 324 higher education institutions held college marketing agreements, though issuers target schools in some states more than others. Population plays a role — California leads all states with credit card marketing payments exceeding $15 million — as do sports programs, such as those at universities in Kansas, Indiana, Alabama, and Iowa, all of which rank in the top 15 states for credit card marketing payments collected by colleges.