Bribe with School Pride

Believe it or not, your school may be associated with a major credit card company like Bank of America or Chase! Having your first credit card is a major step to independence but then, this is what the companies want you to do. Being a college student, you need that extra money your parents would not give you to spend; that extra money you always wish you had, but better, a damn credit, plastic card: slide and pay later.

Your first credit card is what sets these nation/worldwide banks on their toes. It’s lots to do with marketing; the loyalty one gives, branding their image to young college students. How are these major banks getting to students? Well, it seems like many schools in the US are somehow affiliated with these major banks. For example, Florida State University is associated with Bank of America. The terms? Simple: For every new activation there is a commission, for every yearly continuance of usage of the card, another commission per year, for every alumni (graduated) continuing to use the card, another smaller commission and so on. These commissions per student might only be about $5 to $6 per student per year, imagine the commission earned by the students who graduate, leave school, still loyal to the bank associated with the school. Bank of America has a $10.7 million payment to Florida State University for over seven years. That is not even half of what the same bank will pay to Michigan State University for over 11 years, a payment of $25.5 million to the school.

Careful! I know your first credit card is a form of spending money the way you want, but let’s say that your university might be selling your information such as your e-mails and phone numbers to these major credit card companies. Wondering how you got that letter or that phone call to sign up for a credit card? At least we can or hope to rely on the school headmasters to distribute that money well into the schools’ education.

Information obtained from July 28th, 2008 issue of Business Week.