January 02, 2009
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News: What's Up With College Credit Card Promos?
More and more attention is being drawn to the college scene and all the recent credit card promos being conducted on college campuses around our nation. Do the financial perks that the colleges are accepting actually help or hurt the students? Are the students being introduced to sound financial practices or are they being subject to hidden dangers without sufficient guidance in responsibility? Many different facets are involved here, some good and some not so much. The New York Times recently published an article on some of these issues. The over-all impression was that the quest for profit by the credit card lenders was more evident than was ensuring that the students' understood responsible credit card consumption.
The main reason for this concern was the methodology used to stage these promotions. The relationship between these credit card lenders and our universities are the melding of exclusive associations with the alumni associations of these colleges. The on-campus strategies that they use are aggressive. They seem to lure students into opening up credit card accounts. The colleges provide the lending institutions with name lists of the students, complete with personal information.
One of the dubious concerns is where a lending bank will strike a deal at a major university for a 7-year exclusive contract. This contract will subtly, in turn, reward the university with $8.4 million worth of perks. The conflict of interest is glaring. Who's watching out for the students? Meanwhile, the university itself is reaping ongoing rewards even if the students are spending irresponsibly, by collecting a percentage of the bank's profits.
This is not to say that all this is evil. The moneys, after all, go toward university scholarships and other beneficial programs for the students. What seems to missing, however, is the necessary training and preparation to shore up these young ones with the ins and outs; the dangers and pitfalls that await the unsuspecting concerning credit card protections. A set of guidelines and a system of monitoring to rate the effect of what's happening on their campus needs to be in place.