Student credit cards and young credit

3 must-ask questions for multiuse college campus cards


Campus cards, like anything involving money, are not free from potential pitfalls, and the cards’ fees and policies can be as different as Buckeyes and Wolverines.

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Campus cards, like anything involving money, are not free from potential pitfalls, and the cards’ fees and policies can be as different as Buckeyes and Wolverines.

Here are three questions that A-students — and their parents — should be able to answer about their campus cards:

1. Is it from a bank or not?

Colleges struggle with the decision over whether to partner with a bank to offer checking or true bank debit features on their ID cards.

Gary Meszaros, director of auxiliary services, who oversees the Big Red Card at Western Kentucky University, says bank affiliation has two drawbacks:

With a bank involved, it takes longer to replace lost cards. Since students use them for everything from door keys to dining, even 24 hours without a card is a hardship.
The school doesn’t want kids going into debt, he says. School-based accounts usually stop working when the balance hits zero, but with many bank debit cards, the transaction will go through, and the account is hit with an overdraft fee that often runs $25 to $35.

Wachovia works with 16 different colleges to offer free student checking. The bank also presents students with one free pass to cover a day’s worth of overdraft charges, redeemable anytime they choose.

So why not eliminate overdraft fees altogether for students?

That “would be setting the wrong precedent,” says Bonnie Carlson, senior vice president with Wachovia. “We would be telling them it would be OK.” Instead, she says, “our stance is ‘let’s teach them to be responsible adults.’ ”

2. What if it’s lost or stolen? 

“The more of your life that is captured on a single device, the more opportunity there is for mischief,” says Jean Ann Fox, director of consumer protection for the Consumer Federation of America.

“You do have to be careful with this card: Safeguard it and don’t leave it out on your dresser,” she says. “That would be true if you had a debit card from your hometown bank as well.”

At many colleges, online features allow students to report the cards lost or stolen and “turn off” card access to financial features, such as accounts and meal plans. Plus, the cards themselves can be replaced within minutes.

Depending on the type of account, the college and the card program, money stolen from a card could be gone for good, says Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group. “People should be aware that, in some cases, the card will be treated like cash,” he says.

3. It’s easy money, but how will it be spent?

The positive side of both bank-based and school-based debit accounts is that they make it easier for students to get what they need. They also make it easier for students to spend money.

“There is a divorce between parting with actual money and spending,” says Fox.

When campuses go cashless, student spending tends to increase. “I’ve seen everything from a 20 percent to a 50 percent increase in snack and beverage” sales, says Read Winkelman, Cbord’s vice president of sales for colleges and universities.

Lowell Adkins, executive director of the National Association of Campus Card Users, agrees. “It varies from campus to campus,” he says. “I hear anywhere from 10 percent to 50 percent. Part of it is pure convenience.”

One big surprise: “Schools are even seeing a lift in laundry” revenues, he says. Adkins’ theory: If you don’t have to scramble for quarters, you actually separate whites from colors, he says, “and do what Mom taught you.”

See related story: “Cashless colleges — student IDs turn into payment systems

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