For years, credit card issuers took advantage of the opportunity to solicit students on college campuses across the country. Since the passing of the Credit Card Accountability, Responsibility and Disclosure Act, that has all changed. Companies have been forced to distance themselves from campuses and can no longer offer students freebies for applying. More importantly, the CARD Act has revealed deals schools have made with issuers to reel in more profit.
These deals, also known as affinity agreements, have long been a source of millions of dollars for schools, the Miami Herald reports. While some institutions did away with the practice years ago, the CARD Act has exposed many that still rely on these deals for foundation and operation funds.
The paper notes that 84 percent of students have at least one credit card, while most have four or more. Advertisements have been banned under the legislation, but schools are still finding ways to get the issuers to the students.
Debt can result in credit score damage for young consumers, making it more difficult for them to borrow important loans in the future.