It is very common to see leading banks advertise their student credit card schemes at different college campuses. Several leading banks have a long-term contract with colleges that allows them to use the university or college’s logo and more importantly gives them access to the university’s students’ names and addresses. Usually these contracts are between banks and alumni associations of the different colleges. The universities give their students’ names and contact information to the alumni associations, which later on are passed to banks.
Student Bodies’ Reaction
The university gets a commission from the bank on the basis of number of students taking the bank’s credit card. Hence you would not expect these universities to persuade their students for responsible spending when they are receiving a commission on every purchase on the credit card. These contracts between banks and colleges or alumni associations providing their students’ names and contact information have come under harsh criticism. Many student groups across the US are protesting on this issue. They are warning the students of the danger of debt and also urging the universities to limit on-campus marketing.
Banks’ Point Of View
The banks issuing student credit cards say that they always inform students on how to use their credit cards responsibly. They issue student credit cards with more restrictions and stricter terms and conditions as compared to normal credit cards.
A credit card allows a person to spend beyond his means. The students of US colleges are introduced to credit cards on-campus allowing them to spend more. Banks see a golden advertising and marketing potential in this segment while the colleges too view it as an extra source of income at a time when public funding is low due to the global economic crisis.
Your Point of View
Did you get your credit card from your college affiliated programs or elsewhere? What do you think about this arrangement between your school and the credit card issuing banks? Are you concerned about the way your personal information is being used by your school alumni associations? Please share your thoughts.