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Issued under affinity contracts, they represent sweetheart deals between card companies and the colleges. It's the students who pay the price
The Dirty Secret of Campus Credit Cards
The Dirty Secret of Campus Credit Cards
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I carried an "affinity card" ( new term for me) from my undergrad school for a few years. It had decent terms, including a 6 months 0% balance transfer at the time I got it. It most certainly did not have double cycle billing or an interest rate or other terms dissimilar to what I would have gotten elsewhere. It predated the availability of personal rewards credit cards. I was happy to let my old school get a little kick back on my spending. It offered 6% back to my school. As the article says, I did not know the contractual terms with the school, but obviously, at the very least, the school must have sold its alumni list. I think I could have opted out (and still could) on sales of my name & addy by this non-public university.
My son went off to college last year. I had advised him to be on the lookout for good credit card offers, knowing how eager the CC companies are to sign up students. As a matter of fact, the weekend we had visited his campus-to- be, there was a table of students doing a CC company's dirty work ---giving out school t-shirts in exchange for a CC application. Son came home after freshman year without having applied for any of them offered on campus, though I don't know if it was because of unfavorable terms. Most likely, he just did not look into it, as he did not see strong reason to get a card. Over the summer, back home with Mom and Dad, he did select from among the many card offers he gets in the mail. We laughed that the card limit was only $1000 less than the limit on a card I have had for 8 years. His starting limit was 14 times higher than on my very first card, even though he is a 19 year old unemployed student and I was a late twenties, employed for ten years, already degreed person when I got my first card!
From the article:
Some advocates argue that any money made from such credit card contracts should be used for financial literacy programs, to make sure students use credit responsibly. Manning has been campaigning for such programs, as well as for a reserve fund to bail out students who end up over their heads in debt.
I think that reveals an attitude of, "Students are ignorant, innocent victims. They can't be blamed for spending more money than they have, and the school should bail them out when they can't pay their credit card debt if the school benefited from the issuance of the card or the campaign to market the card." Financial literacy programs? How about if the school uses the profit for whatever makes sense to them.
I see no reason whatsoever for students not to read the terms of their CC before they make the final signing. Sure it may be boring and be a little hard to read, what with that tiny print all squished together so that one has to use a straight edge to follow the lines. But be a grown up and look out for yourself when you sign a contract. Don't wimp out because it takes too much effort to read the terms. Good grief."There is some ontological doubt as to whether it may even be possible in principle to nail down these things in the universe we're given to study." --text msg from my kid
"It is easier to build strong children than to repair broken men." --Frederick Douglass -
Of course people need to be responsible..that's a no brainer.
CC Co's need to be responsible too, and stop the easy credit they give to so many.
I don't believe for one minute they are hoping these college students who get cards will all be responsible and pay their balances off every month.
They call those who do pay in full every month "deadbeats". They don't make the big $$$$$ off of them.
Oh, the big bucks come from those who make bad mistakes. If its a crime to make mistakes, then the punishment these co's dole out doesn't fit the "crime"
Nobody who can't pay off the balance should be held hostage with
loan shark interest rates and ridiclously high penalty fees.Comment
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There ain't no such thing as a free lunch.Comment
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Having a "reserve fund" to bail out college students who get in over their head is ridiculous. How will they learn to manage their money if they get bailed out? Why should those who are poor money managers get a free ride when there are those who charge responsibly and pay off their balances every month? Why does no one in this article question why parents and/or the education system do not educate teens on credit and finance, or even more appropriately, why these students sign up for something they don't understand? My parents talked to me about money BEFORE I went to college. I did sign up for an affinity card and have had it for over 10 years. I rarely, if ever, carried a balance on it. I think I missed one or two payments - got the fee waived once and paid it the other time because it was my fault.
Why not? It's all spelled out in the terms before you even accept the card. If you run up a balance that you can't pay off, why shouldn't the cc companies be able to collect on the fees and interest charges that they set? There's no surprises in the contract if you read it. It says what the fees are, when they can charge them, and when they can jack your rates up.Originally posted by Pupart View PostComment
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I am not in favor of bailing anyone out.
I am in favor of reasonable interest rates and fees so a person who is in trouble can pay their debt off in a timely manner and get on with their life.
Everyone makes mistakes . Everyone!!
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Originally posted by jodi View PostComment
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