Reeling in Credit Cards on Campuses
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College campuses offer a lucrative venue for companies marketing credit cards. 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.
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 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. 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. Recently, student organizations have been speaking out against the aggressive marketing practices that could harm students in the long run. Even the politicians in Congress have been examining the contracts between academic institutions and banks, as hearings were held about the issue last summer.
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. 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.
Article Source: Articlelogy.com
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