Reeling in Credit Cards on Campuses
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by: barrywaters
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Word Count: 447
Credit cards on university campuses have become as common as college sweatshirts. Students are solicited to apply for credit cards frequently, as they pass tables with free pizza and incentives if they sign up. Students are an easy sell. Most are experiencing the sense of being independent like never before in their lives. While some may already have credit cards through their parents, the allure of having their own cards is extremely tempting.
University and banks have long standing relationships. 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. These mutually beneficial relationships put students in the middle at a time when many of them are not yet able to budget or fully appreciate the long term effects of debt. 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. Student credit cards offer an opportunity for students to develop a relationship with a bank and build a foundation for their credit history. Banks offer seminars on responsible spending, budgeting and paying off balances on credit cards. They also claim that student credit cards have some built in protection that other cards do not offer, such as decreased credit limits. Some banks are even giving students the option to open debit cards in lieu of 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.
Like everyone else, students are feeling the affects of the economic downturn. Many students apply for credit cards to help defray bills and other costs. The presence of banks on campuses will remain a part of college life, but it appears that it will be a less exploitive presence than it has historically been. Hopefully students are learning valuable lessons from the credit crises and will approach credit card solicitations with a discerning eye.
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Information on student credit cards, click getsmart.com/credit-cards.
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