Campuses and Credit Cards
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by: barrywaters
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Word Count: 439
College campuses offer a lucrative venue for companies marketing credit cards. Walk on any campus and you will see representatives from various companies giving away shirts, mugs and applications for credit cards. Students are an easy sell. Many are away from home for the first time and are asserting their independence. The idea of having credit cards in their name can seem like the ticket to financial freedom.
Banks have a tradition on many campuses. At a campus in Michigan, Bank of America has a relationship with the college that grants it the right to use student enrollment lists. The bank gives the college money for any new coeds who get credit cards with them. Some relationships between banks and academic institutions even give bigger incentives for those student credit cards that regularly maintain balances. Although these contracts benefit both the university and the credit card company, they have the potential to exploit young people who many not know the consequences of poor spending decisions. As a result, many student groups are raising concerns about credit card issuers exploiting students. The relationship between banks and universities also came under a microscope when hearings were held on Capitol Hill last June to scrutinize campus marketing practices.
Credit card companies claim they are acting in good faith and helping students learn to become responsible consumers. When students have credit cards of their own, they are laying the building blocks for their credit report and learning how relationships with banks work. Many banks that offer student credit cards provide courses for those customers on how to responsibly use a credit card, the consequences of not paying an outstanding balance and financial planning. They also claim that student credit cards have some built in protection that other cards do not offer, such as decreased credit limits. Students on many campuses can sometimes even choose between having debit cards or credit cards. Academic institutions say that any contracts they have with banks are undergone lawfully, benefit student programs and are in the best interest of students. Even so, many have taken steps to limit access to student information when they enter into new contracts with banks.
The current tough financial times are hitting students too. Some may open credit cards to help with expenses. It appears that banks and universities will continue to have marketing contracts and relationships, albeit at less aggressive levels than in the past. Students are likely taking notes during the current economic downturn and will research and understand how to be responsible credit card consumers.
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Find more information on credit cards, read www.getsmart.com/credit-cards.
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