Many credit card companies see the marketing potential in college students. Credit card companies use promotional offers and free gifts like t-shirts, coffee mugs, or CDs to entice students on signing up for their company. Have you ever asked why? Loyalty is a good reason. Credit card companies are competing to be the first credit card that the student will own. By being their first credit card, it is very likely that even when they graduate from college and enter the corporate world, students will be upgrading their credit cards with the same credit card company.
I think you answered your own question. After high school I worked for 4 years at different companies. I applied for different credit cards but always got refused. I had a pretty good income and everything. And I only applied to get a $300 credit. Always got refused. They said they could not accept me because I don't have any credit. After that I went back to school, to college, I applied for a credit card and got one right away, of $1,000 credit. I had ZERO revenue and yet they accepted me. And when I worked I had a revenue of around $25,000 and they never accepted me. Couple months later they raised my credit to $4,000 saying I have a good credit. But still ZERO revenue, only student loan. So my theory is, if you are working, they are not going to make any money from you, since you have the money to pay your bill every month. But if you are a student and you got a $4,000 credit available and you use it, you are for sure not be able to pay it right away. That's when they make money with the interest.
Sorry if I sounded cynical here but it might be that students being new to finances and may not be all that responsible when it comes to spending so thus they might be ripe for the picking. When I was young, I spent money like there was no tomorrow and worst when I've got my first credit card where I almost hit the limit almost all the time and had to roll over the balance from month to month by just covering the minimum payment each month. I've seen that the amount of interests I've paid were simply out of this world. Credit card companies earn when you make purchases and more if you roll over your balances. In the end, it is all about the money.
You ask this question, unsolicited. I was really wondering not, "why do credit card companys target college students," but rather, "why is the poster pondering a rhetorical question at DP?" And then I noticed in your signature line that you're promoting... Student Credit Cards!
This whole system of relying on credit to get you through is a shame. Now, if only I could pay off my mortgage and my credit card...
Well, I believe it varies from country to country or merchant to merchant. Here in Singapore, the credit card companies charged between 3 to 5% per transaction apart from the other monthly fees from the merchant. So basically, if they do not make from the customers, they will still make from the merchant.