Credit cards on university campuses have become as common as college sweatshirts. Students are solicited to apply for credit cards frequently, as they pass tables with free pizza and incentives if they sign up. College kids are an effortless target. Many are away from home for the first time and are asserting their independence. While some may already have credit cards through their parents, the allure of having their own cards is extremely tempting.

University and banks have long standing relationships. Bank of America and Michigan State University, for example, have a multi million dollar contract that gives the bank access to the names of students currently enrolled. The university gets a kick back for students who open credit cards with the company. Contracts like these often offer universities even more money, if their students carry balances on those credit cards. These mutually beneficial relationships put students in the middle at a time when many of them are not yet able to budget or fully appreciate the long term effects of debt. As a result, many student groups are raising concerns about credit card issuers exploiting students. The relationship between banks and universities also came under a microscope when hearings were held on Capitol Hill last June to scrutinize campus marketing practices.

Credit card companies claim they are acting in good faith and helping students learn to become responsible consumers. Student credit cards offer an opportunity for students to develop a relationship with a bank and build a foundation for their credit history. Many banks that offer student credit cards provide courses for those customers on how to responsibly use a credit card, the consequences of not paying an outstanding balance and financial planning. They also claim that student credit cards have some built in protection that other cards do not offer, such as decreased credit limits. Some banks are even giving students the option to open debit cards in lieu of credit cards. Academic institutions say that any contracts they have with banks are undergone lawfully, benefit student programs and are in the best interest of students. Even so, many have taken steps to limit access to student information when they enter into new contracts with banks.

Like everyone else, students are feeling the affects of the economic downturn. Many students apply for credit cards to help defray bills and other costs. It appears that banks and universities will continue to have marketing contracts and relationships, albeit at less aggressive levels than in the past. Hopefully students are learning valuable lessons from the credit crises and will approach credit card solicitations with a discerning eye.