Campuses and Credit Cards
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by: barrywaters
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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. The idea of having credit cards in their name can seem like the ticket to financial freedom.
University and banks have long standing relationships. Bank of America and Michigan State University, for example, have a multi million dollar contract that gives the bank access to the names of students currently enrolled. The bank gives the college money for any new coeds who get credit cards with them. Contracts like these often offer universities even more money, if their students carry balances on those credit cards. 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. Even the politicians in Congress have been examining the contracts between academic institutions and banks, as hearings were held about the issue last summer.
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. 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. 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.
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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