Credit Card Companies Target College Students-Part 3

The credit card companies have ensnared the college and university system in their web of exploitation of college students. The schools have contracted with credit card companies in affinity programs that undermine students' interests. An affinity program is a contractual agreement between a credit card issuer and a university in which a card company can market to the students, faculty, and alumni their cards exclusively; in return the university gets money.

The money in return for exclusivity can run into multi-millions, much needed funds for many universities. However, this comes at a steep price, with colleges forgoing their responsibilities to students. An inherent conflict of interest arises with these affinity programs; as the college overlooks student interest for sake of credit card company interest.

Affinity relationships can be worth more than $15 million, depending on the university. Usually, the affinity agreement includes the school partnering with a credit company to issue a co-branded card, a school logo card. Bank of America has majority of the exclusive deals with colleges, with 900 agreements. Chase has 40 affinity partnerships with schools nationwide.

Also, the schools can earn annual royalties, in the millions. In return for payments, card companies get access to entire student, faculty, and alumni lists. They also can market at school events, such as sports events and more.

So, what is the harm, some say? The affinity programs pose a direct threat to the schools responsibility to students' benefits. The colleges when tempted with easy funds will not shy away from scrutinizing the credit terms or their marketing activities.

Chase's wonderful credit card terms included double-cycle billing, which according to the General Accounting Office is a method used by one-third of credit card issuers. A double cycle billing example: I have zero balance and I purchase something for a $100. I make my payment on-time of $75 and carry over a $25 balance into the next statement. When I get me next statement, under the double-billing method I would be charged interest on the full $100, rather than the $25 balance alone. This is one of the most audacious, loan shark like, weasely, and reprehensible things credit card companies do.

Imagine, exploiting financially innocent students this way, let alone general consumers. Unless, there is grassroots uproar against the cozy nexus between the colleges and credit card companies, such practices will continue. The only ones to suffer will be students and their families.

Part 4: Coming soon...

Article: GimmieTheScoop