Question

At the beginning of the school year, representatives of credit card companies and banks flock to college campuses. Students are often offered free gifts, student credit cards, free checking accounts other incentives for opening an account. But students usually have no credit history that lenders can use as a guide to assess risk. Why would these financial organizations try so hard to capture student business?

Answer 1

Credit card companies are often flocking to the college campuses because they want to acquire a market of various students who can be their long-term customers so students generally do not have a Credit history but lenders are always using these markets as a target market because-

A. these credit card companies are always looking to lure these students so that they can offer them credit for longer period of time and they are wanting to discount their future earnings rather than their past earnings.

B. Credit card companies are trying to bank upon the better future of the students and they are wanting to offer them with student Credit card which they can be paying up with once they are into their job.

C. they are trying to make the students habitual to use the credit so they can explore their market and they can exploit the opportunity of earning a higher rate of return from these students, once they are placed into various organisations.

D.They can be discountingdiscounting the future earnings of the students and retention of the students for a longer period of time through investment into them.

so it can be summarised that credit card companies are often looking to capture the student business because these businesses are offering them with a very lucrative opportunity to capture a high share of the market at a longer period of time and retain the students so that they can maximize their earnings.