Saturday, August 02, 2008

Colleges Marketing Credit-Cards

A question I find interesting is which industries are the worst to work in. This question isn't about which ones pay the least or are the most dangerous, but rather which ones require the most "checking of the morals at the door" to work in.

Often the "sin industries" of alcohol and tobacco are assumed to be the worst, but there's a sometimes overlooked contender for most repugnant... the specific areas of the credit-card industry that target college students.

The July 28 issue of BusinessWeek features "The College Credit-Card Hustle" about the contracts between large credit-card companies and Universities and University Alumni Associations to target students. These can be big money deals and often include commitments from the school to promote affinity cards to students. Schools and alumni associations make big money from these deals and credit-card companies defend them by saying their cards offer the valuable service of credit to students.

The question the article raises is how valuable is this service for youth who often don't comprehend what they're getting into with a credit-card and according to figures from Florida State University are "four times as likely as alumni to be delinquent on a (MBNA) credit card bill."

Credit-card companies cannot (and shouldn't) be prevented from offering cards to students, but schools and school-affiliated organizations should take a hard look at their complicity in the effort.