As a college student, I must admit I was duped into opening a credit card my freshman year. I was lured in by the fact that all my friends were rockin’ their free TCF sweaters and, of course, the concept they pushed of “buy now, pay later.” But credit-card companies marketing themselves heavily on college campuses isn’t new: It’s the perfect place to find new customers who are low on cash and looking for a sweet deal. But have you ever wondered why some colleges allow TCF on campus as opposed to Bank of America- they pay to be there. That may not be the shock of the century but with payments hovering at almost $84 million, you have to question the ethics of it. According to a report released by the Federal Reserve Board, credit-card companies paid $83.5 million to colleges, their foundations and alumni organizations last year under agreements that allow them to market credit cards to students and alumni. Under the agreements, schools and affiliated groups were generally paid for each account opened.
Why were credit-card companies willing to disclose such details? Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, credit-card issuers are required to submit their agreements with colleges and related organizations to the Board of Governors of the Federal Reserve; they must also disclose the total number of opened accounts. Of the agreements reported, about 40 percent were with colleges and 33 percent were with alumni associations. The agreements resulted in the opening of 53,000 accounts in 2009. [...]