Universities benefit from student credit card accounts
The Mizzou Alumni Association says it does not sell student information.
Published Jan. 26, 2009
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Companies such as Bank of America actively market credit cards to students on college campuses including MU, often with permission from administrations and alumni offices. The student-run Tigers Credit Union offers but does not market credit cards to students, instead encouraging responsible financial practices through biweekly workshops.
Among the many worries of college students is credit card debt, but some universities are profiting from their credit card accounts.
Companies such as Bank of America market credit card accounts to students by setting up a table and offering free gifts with every account opened, such as T-shirts or blankets.
Some universities, such as the University of Michigan, go so far as to provide companies with lists of student names for contact purposes. That process is usually conducted through the universities' alumni offices.
Mizzou Alumni Association Executive Director Todd McCubbin said the association has a similar relationship with Bank of America but does not provide student information.
"We never have provided lists of student names to our credit card partner," McCubbin said. "We just never have felt that that was something we should do."
The Bank of America Web site states money is contributed to MU for every credit card account opened. "With every new account that is opened and every purchase made, Bank of America will make a contribution to University of Missouri-Columbia," the site states.
Bank of America declined to comment.
McCubbin said money goes toward general operations funding for the association. Tigers Credit Union also offers credit cards but takes extra steps to ensure students handle their fiscal commitment in a responsible manner, credit union employee Laura Royse said.
"We don't really market credit cards specifically to students," Royse said. "We have a little different philosophy because we're member-owned. We're non-profit, and we'll only give credit cards with the appropriate education, financial workshops, materials about what makes up a credit score, how to use credit responsibly."
Tigers Credit Union is run by finance and banking majors. The union, Royse said, does not have any deals with the university similar to Bank of America.
"We only encourage credit cards to people who are already members of ours," Royse said. "We explain to them the responsibilities of using credit cards. We're very careful about our solicitation."
Royse said the demand for financial education has increased and attendance has picked up at the biweekly workshops offered by the union. Guest speakers at the workshops include experts on identity theft, debt management and budgeting.
"Part of our mission is education," Royce said. "We offer education on responsible use of credit cards, not just offering credit cards."