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Credit Card Companies On Campus

I just came across an interesting story in the business section of the New York Times. It’s about the chummy relationship colleges and universities have with credit card companies. If you get a chance click the hyperlink above and take a look at the article. The piece examines how credit card issuers have a special relationship with colleges that are extremely lucrative.

In one example the article points out how Michigan State inked a 7 year contract for $8.4 million with Bank of America. In exchange for their money, Bank of America gets access to the names and addresses of Michigan State students and use of the University’s name and logo, used no doubt, for soliciting credit card applications.

Michigan State is not alone in this venture. Hundreds of colleges across America have similar deals with credit card issuers. It would appear that it is only now coming to light due to the current credit crisis and mounting personal debt sweeping the U.S. It would seem that students are now bristling at the credit card companies overtures and are forming student groups to, at the very least, raise awareness of the relationship between the schools and card issuers.

At issue is the credit card companies history of some rather dodgy practices. Many believe that they target students because they see them as easy marks that are prone to running up high balances. Typically student credit cards come with a higher APR than general consumer credit cards. Getting students at a young age is also a good way to generate new customers that they hope will be with them for many years to come.

For Michigan State’s part they say that the program is designed for alumni and that current students are a very small part of their target market. They also state that in future contracts with credit card companies they will no longer share current student names and addresses.

For Bank of America’s part they say that student cards have limits capped at $2500 and that they promote responsible use of credit. What they really want to do is establish a long financial relationship with the students.

Michigan State and Bank of America are by no means the only players in this. Head on over to the article (link is supplied above) to read it. It is quite interesting.

Related Information:

  1. Credit Card Companies Marketing On Campus Credit card companies have aggressively marketed to students for many years now. But apparently that in your face marketing strategy has reached critical mass at some college campuses. Michigan State…
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