{"id":17003,"date":"2010-09-20T20:00:09","date_gmt":"2010-09-21T00:00:09","guid":{"rendered":"\/\/www.askmrcreditcard.com\/news\/?p=17003"},"modified":"2010-09-20T20:00:09","modified_gmt":"2010-09-21T00:00:09","slug":"colleges-profiting-from-credit-cards","status":"publish","type":"post","link":"https:\/\/www.askmrcreditcard.com\/news\/colleges-profiting-from-credit-cards\/","title":{"rendered":"Colleges Profiting From Credit Cards"},"content":{"rendered":"

The exploitation of college students was specifically targeted by the CARD Act.\u00a0\u00a0 In the past, banks were heavily marketing their products on campus to students who had no real means to pay off any money borrowed.\u00a0 It was a textbook example of predatory lending.\u00a0\u00a0 Under CARD, adults under 21 have to show a means to pay their bills or get a co-signer.\u00a0 Furthermore, banks are prohibited from marketing their products within 1000 feet of campus.<\/p>\n

Colleges Getting A Cut From Cards<\/strong><\/p>\n

Think of it as a new twist on cash back credit cards.\u00a0\u00a0 Instead of the cardholder getting cash back from the bank for using the card, your local college is getting cash back from promoting the credit cards.\u00a0\u00a0 This article in the Denver Post <\/a>details how cash strapped colleges in Colorado are making deals with banks to promote their products.\u00a0\u00a0 The idea is that a banks will pay the school money to co-brand a credit card with the school’s logo.\u00a0\u00a0 More money is made off of ATM placements, and even a cut of the merchant fees.\u00a0\u00a0\u00a0 For example, the University of Colorado Alumni Association and the University of Denver both get .5% from each transaction made with their cards, operated by different divisions of Bank of America. \u00a0\u00a0\u00a0 \u00a0 How do we know this?\u00a0\u00a0 Another provision of the CARD Act requires that schools disclose their marketing agreements with the banks.\u00a0\u00a0 There is no reason to believe that these programs aren’t common at colleges throughout the nation.<\/p>\n

Is This A Good Deal?<\/strong><\/p>\n

Whether or not this is a good deal, depends on your perspective. \u00a0 If you are on the board of one of\u00a0 these colleges, and you are looking for every dollar you can find to fund your school, these agreements are a great move.\u00a0\u00a0\u00a0 The University of Colorado will make 7.1 million dollars over 7 years, nearly half a million a year.\u00a0\u00a0\u00a0 This is money that the citizens of the state, (like me), or their students, (like my wife), don’t have to pay.<\/p>\n

For cardholders, the deal isn’t quite as good.\u00a0\u00a0 The University of Colorado card marketed to students is from a local credit union, unlike their Alumni Association card from Bank of America.\u00a0\u00a0 Credit unions generally offer better service and more competitive interest rates than bank cards.\u00a0\u00a0 On the other hand, the bank cards seem to provide a maximum of 1% cash back to the card holder.\u00a0\u00a0\u00a0 This is pretty much the bare minimum you can expect from a reward credit card.\u00a0\u00a0\u00a0 You will get the satisfaction of knowing that you are benefiting your alma mater, but unlike a cash donation, your sense satisfaction is not tax deductible.<\/p>\n

Elizabeth Warren, who has been chosen to set up the Consumer Financial Protection Bureau<\/a>, put it this way in her testimony to Congress about the CARD Act; “Credit card companies have become masters at probing every human trait\u2014failure to scrutinize bills, willingness to try to help an alma mater<\/strong>, inability to make correct calculations on present discounted value of various card terms.” <\/em>Simply put, these cards are in the best interest of your school, but it is very easy to find a reward card that would be of greater benefit to yourself.\u00a0\u00a0 If you still want to benefit your school, take a chunk of your rewards and make a tax deductible donation at the end of the year.<\/p>\n


\n<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The exploitation of college students was specifically targeted by the CARD Act.\u00a0\u00a0 In the past, banks were heavily marketing their products on campus to students who had no real means to pay off any money borrowed.\u00a0 It was a textbook example of predatory lending.\u00a0\u00a0 Under CARD, adults under 21 have to show a means to […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[8],"tags":[],"yoast_head":"\nColleges Profiting From Credit Cards<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.askmrcreditcard.com\/news\/colleges-profiting-from-credit-cards\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Colleges Profiting From 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