Credit Cards on Campuses
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by: barrywaters
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Word Count: 438
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. 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.
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. 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. Additionally, they say the credit cards offered to students have lower limits and more restrictions than those marketed to graduates. 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. In spite of those claims, there has been a movement to rein in the right to use student data when universities establish new bank relationships.
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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