Customized college credit cards raise concerns

FORT MYERS: Customized college credit cards are becoming the new way for students and alumni to show their team spirit and it is also becoming a plastic cash cow for universities. But what the school officials are doing in return for the advertising may be putting the customers at risk.

School officials are striking deals with banks to offer co-branded credit cards, but part of the deal includes selling student information. Some critics say they are also selling student privacy.

Hundreds of schools, including the top 10 largest universities, are banking on their students and alumni to show their pride with so-called affinity cards.

"The cards are a great way to promote the school. It provides a lot of visibility for the institution," said Roger Williams with the Penn State Alumni Association.

But the cards are not only good for advertising, they bring in money for the school as well.

Penn State was one of the first schools to team up with banks that offer customized cards. Now, the school gets an annual fee for partnering in the program.

"There are incentives in the contract, such that, if balances achieve a certain level, there is a bonus payout," said Williams.

School officials say they use the money to help fund things like scholarships, school activities, and libraries.

But Travis Plunkett, of the Consumer Federation of America, explained it is what the schools must do in return that have some consumer advocates concerned.

"In exclusive marketing arrangements, universities often give the names of the students to the credit card companies," said Plunkett.

"They must offer either mailing addresses, as well and in some cases telephone numbers, and even email addresses," said Robert Manning, credit card expert and author of, "Credit Card Nation."

Consumer advocates argue the move violates students' privacy. However, Williams claims credit card companies will find new ways to reach undergrads with or without help from schools.

"The credit card companies, nation over, are fairly adept at assembling massive mailing lists of college students. What our program does is to sort of channel that into a program that's going to make things better for the university," said Williams.

"My ultimate concern is that nobody wants to be accountable for the social impacts of those students who can least afford the responsibilities of credit card debt," said Manning.

Plunkett says his main worry is that students will become so caught up in what is on the front of the card, they will pay little attention to the terms.

"We're very concerned that they won't be looking hard at the fine print of these offers and sometimes the fine print is scary," said Plunkett.

In Southwest Florida, neither Edison College nor Florida Gulf Coast University participate in a credit card program.

The University of Florida does, but the alumni association handles the agreement. Florida State has the same setup. Both universities have several restrictions including limiting when credit card companies can solicit business and they must have a counselor available to talk to students about credit card debt.

By - Paul LaGrone