College students beware: School is back in session in a few short weeks, and that also means credit card companies are gearing up to tempt you with as many offers as possible. Often, you’ll see their tables set up in student common areas, laden with enticing gimmicks – from baseball hats to MP3 players.
Selling student information to credit card companies
But some colleges give credit card companies even more leeway. Instead of (or in addition to) allowing credit card booths, colleges sell student information to the credit card companies. Armed with student names and addresses, the credit card companies happily launch direct marketing campaigns that might be even more persuasive than the “free t-shirt offer” in the quad or student center.
The more debt students rack up, the more money colleges receive from the credit card companies. Washington State University, for example, had a partnership with MBNA from 1997-2007 that gave the school a certain percentage of money based on how much students charged on the cards. That’s so far over the line that it’s almost impossible to form a coherent response to it, other than to wonder just how they managed to get away with it.
Students subjected to credit card marketing, but what about credit card education?
Personally, I don’t think there’s anything inherently wrong with direct marketing, since you can always just throw the mail away. But I do think that some sort of required personal finance class should be a part of the college curriculum. Far too many parents either have horrible financial habits of their own, or they just don’t bother telling their children anything about credit. My mom was like that, and I wish she had bothered bringing it up while I was still in high school. Instead, college students are running face first into overwhelming debt, feeling stress that they should certainly not have to deal with along with their studies. A course on personal finance would help students to make smarter decisions when it comes to credit, so they would know when to resist the siren call of free frisbees or beach towels coming from the credit card application booths.
Additional fees for paying tuition with a credit card
Another way students are getting squeezed between creditors and colleges is when they use a credit card to pay tuition. USA Today is reporting that more than 1 in 4 colleges are charging students extra fees for putting tuition on credit.
Some colleges might genuinely have the students’ best interest at heart here, charging fees in an effort to discourage additional credit card debt. But that’s just my optimistic side talking. The real reason behind these fees is that colleges have to pay to process card payments – and they’re just passing on the cost to the students and parents as opposed to paying it themselves. And why not? It’s unlikely that students are going to transfer to a different school simply because it doesn’t charge a processing fee for credit card payments.
Now, I’m not saying it doesn’t smack of opportunistic, but I’d rather the schools be doing this than getting in bed with the credit card companies (and getting kickbacks on top of that). Either way, though, college is not looking pretty when it comes to credit.