Students beware of campus credit cards

Here in October, our college students are settling into the second month of their studies, and the collegiate football season is well under way. Embracing the college culture means supporting all collegiate-sponsored activities, including signing up for those affinity campus credit cards, the special plastic with the beautiful logo of the student’s school embossed for all to see.

Pretty pictures, pretty plastic, all supporting the college spirit and the image of collegiate consumerism. Go to the football game, stop and fill out a credit application at the credit card booth.

Sadly, there is a nasty little secret here. Many colleges have entered into sweetheart deals with the credit card issuers. These questionable deals pay the school large sums of money, but all the student gets is high interest rate cards and unfavorable credit terms. Also the cardholder’s name and address are freely provided to the credit card companies thanks to the college’s financial greed.

The end consumer, the college student, is getting double-teamed by the school and the credit card company, and often doesn’t have a clue what is happening.

Campus credit cards have been around for many years, but the consumer should be cautious about the terms of these cards. Read the fine print. How is interest calculated? What are the penalty fees? Consider taking the collegiate credit card application with the terms of the contract to your local federal credit union or bank and ask how their credit card terms stack up against the affinity college plastic terms.

The college plastic card may be beautiful in appearance, but the legal agreement attached can have ugly consequences for the student consumer. Comparison shopping is a must in these situations. Young consumers and their parents should work together to discuss the wonderful world of credit and how to use credit wisely.

This is not unlike throwing the baby into shark-infested waters. The pain and suffering of abusing high interest credit cards is real on campus to many students who fail to recognize that a financial day of reckoning is coming.

There are several reports of students who have committed suicide primarily because they are in way over their heads in credit card debt, not because they are struggling with the curriculum or have just broken up with a romantic interest.

We are all aware that credit card issuers will stop at nothing to fill their coffers. We do not expect this behavior from our colleges and universities. The terms of these sweetheart deals are closely held secrets that should see the bright light of day. The college should be helping students get an education, not hopping into bed with the credit card issuers, at the direct expense of the student.

Students and parents should go into any credit agreements with eyes wide open and with a full understanding of the terms to which they are agreeing.

Yes, these are tough times for colleges and universities, with state and federal funds on the wane, but delivering the names and addresses of their student body to credit card sharks as part of a big financial payoff is reprehensible.

The great state of Maine has many fine universities and colleges both public and private. Their primary mission is to educate our most valuable resource – our children. It would be refreshing if they would all put the details of their financial dealings with credit card issuers out there for the public to examine.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership funded nonprofit consumer organization. Individual and business memberships are available at modest rates. Interested and motivated prospective volunteers are always needed and welcomed to apply to help with our mission. For assistance with consumer-related issues, including consumer fraud and identity theft, or for more information, write: Consumer Forum, Bangor Daily News, P.O. Box 1329, Bangor ME 04402-1329.