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Think colleges want to kick credit-card companies off their campuses? Think again. Institutions of higher learning are earning an awful lot of cash from Visa, Discover, MasterCard and the rest.
According to the DNI.com Web site, 18 colleges, student groups and alumni associations in Tennessee earned $1.8 million last year for allowing credit card companies to market college-themed cards to students and former students.
At the same time, the Web site APP.com reported that Rutger University in New Jersey earned $562,637 last year thanks to credit cards bearing the university’s name. APP.com also reported that 18 colleges and universities in the state earned a total of $1.24 million thanks to credit-card companies.
In other words, colleges are still raking in the big bucks from credit-card companies that market their products to their students.
Consumer advocates, not to mention parents, have long worried over the cozy relationship that many colleges have with credit-card companies. Colleges for decades have allowed credit banks and lenders to advertise their cards on their campuses. And they haven’t backed away from allowing companies to hawk “student” credit cards to the young adults taking classes in their buildings.
The critics of such arrangements say that college students can too easily run up massive amounts of credit-card debt. And this debt doesn’t go away; it follows them for the rest of their lives.
There are supporters of the relationship between credit cards and colleges, though. They say that college students are adults. They have the right to take out credit cards if they’d like. And they also have the responsibility to use them wisely. They should know that running up large sums of credit-card debt is a poor financial decision.
Supporters also say that colleges today can’t afford to turn away any sources of revenue. Many colleges are strapped for cash. They’re raising tuitions to levels that a growing number of prospective students can’t afford. In this environment, supporters say, it’d be negligent for colleges to turn away the credit-card companies and the revenues that they represent.
Who’s right? That’s hard to say. But if you’re a parent, the odds are good that your college-age children will face the temptations of credit-card companies and their lure of easy credit. It’s your job, then, to teach your children to use credit properly.
Too few high schools teach their students the basics of credit, budgeting and good financial habits. That means it’s up to parents to share these lessons with their children.
Before sending your kids off to college, sit down with them and explain the danger of treating credit cards like a source of free money. Explain how interest works, and how easy it is to run up huge amounts of high-interest-rate debt on credit cards.
Your children’s best defense against bad credit habits, and the financial woes that they can cause, is a crash-course education on the pitfalls of credit cards. It could be one of the most important lessons that you share with your children.