Marketing Credit Cards to Students
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by: barrywaters
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Word Count: 462
Credit cards on university campuses have become as common as college sweatshirts. Walk on any campus and you will see representatives from various companies giving away shirts, mugs and applications for credit cards. College kids are an effortless target. 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.
Banks have a tradition on many campuses. 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 university gets a kick back for students who open credit cards with the company. Contracts like these often offer universities even more money, if their students carry balances on those credit cards. 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.
Banks that have contracts with universities contend that they are providing a valuable resource for students. 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. Additionally, they say the credit cards offered to students have lower limits and more restrictions than those marketed to graduates. 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. It appears that banks and universities will continue to have marketing contracts and relationships, albeit at less aggressive levels than in the past. Hopefully students are learning valuable lessons from the credit crises and will approach credit card solicitations with a discerning eye.
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