Friday, June 9, 2000

Entrepreneur's Sites Offer Students Tips on Good Credit -- and Credit Cards By SCOTT CARLSON Over the past 10 years, Larry Chiang has made millions from a business that markets credit cards to college students. So it's in his interest to help those students manage their plastic money wisely and avoid the quagmires of credit-card debt. Now, as more and more student spending moves online, Mr. Chiang has followed, creating a suite of Web sites that offer students credit counselors, financial calculators, and tips on how to save money and stay out of debt -- as well as opportunities to get credits cards through his company. While some people might prefer that advice on managing credit come from disinterested sources, the tips Mr. Chiang's sites offer could be helpful to students, many of whom would have trouble finding similar information anywhere else. And the sites are increasingly typical of the Web, where fewer and fewer sites offer information without also incorporating some element of marketing. But some of those who work in nonprofit financial counseling see the combination of credit advice and commercialism as a conflict of interest. "There is just no reason to have a for-profit enterprise in the educational business," says Samuel J. Gerdano, executive director of the American Bankruptcy Institute, a nonprofit organization that offers financial advice and information about bankruptcy law. "There are plenty of nonprofits that offer credit information to kids." Mr. Gerdano cites the Jump Start Coalition for Personal Financial Literacy and the National Foundation for Credit Counseling as nonprofit organizations that can help people figure out their finances. "It's better to find a company that doesn't have a financial stake in your continuing debt burden," he says. Mr. Chiang's Web sites -- 99Tips.com, Credit Healthy.com, and College-Visa.com -- are simply made and even incomplete in areas. Mr. Chiang says Credit Healthy.com is going through a redesign this summer. But the sites' suggestions for students appear to be solid ones. The sites outline basic advice and information about credit management. For example, Credit Healthy tells users how to interpret a credit report, how to find errors on the report, how to contact a credit bureau to correct them, and how to avoid common pitfalls that plunge some students into debt. The sites also explain the methods that loan officers use to evaluate someone's credit. However, the session wraps up with a sales pitch -- "Now that you've completed our Credit Strategies Seminar, start putting all this knowledge to work for yourself and apply for a credit card!" -- and a link to page that gives information about how to apply for a credit card through Mr. Chiang's company. Mr. Chiang says there's no conflict between good business and good ethics. "What's good for the consumer is not necessarily bad for business," he says, adding that he gives students inside information about how to "beat the system." For example, he tells students that they can raise their credit rating through tiny purchases. He points out that credit bureaus can't tell the difference between a $15 purchase and $15,000 purchase. "All they know is that it's been paid on time," he says. If his sales-and-self-help approach has been a part of his conscientious business ethic, it's also been a shrewd tactic. Mr. Chiang has persuaded several colleges to ban credit-card marketers that don't offer at least a 10-minute educational session along with their pitches. In doing so, Mr. Chiang has effectively shut out much of his competition on several campuses. Easy-to-print version E-mail this article

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