Credit card companies have recently targeted colleges across the nation to market a new product, but Ohio University’s campus will not be one of them.
U.S. Bancorp, Wal-Mart Stores Inc. and MasterCard are now offering prepaid debit cards. Unlike other debit cards, which are linked to a bank account, users purchase these cards and load money onto them.
While OU does not have a written policy prohibiting credit card companies from soliciting consumers at OU, the university would not permit these companies to advertise on campus, said Kent Smith, vice president for Student Affairs.
“I don’t want students to learn the hard way,” Smith said. “I’m still amazed what some students will do for a cheap freebie.”
Smith fell for similar marketing as a student at Southern University, where he rapidly reached his card’s $1,000 limit.
He said he had “no clue” of the consequences until he had to pay off the minimum amount each month.
With prepaid debit cards, students cannot spend more than they put on the card. There is a set amount, and students can track their balances online. The debit card companies also do not match cardholders with banks.
Nancy Norris, spokesperson for Chase Bank, said a relationship between banks and students is valuable.
“When students become a customer of Chase, we hope they will be there for many years to come,” she said. “So we take the time to sit down and talk to students about their needs and make an informed decision on how best they can handle their money.”
Deborah Thorne, associate professor of sociology at OU and an expert in credit card debt and bankruptcy, said prepaid debit cards should not be marketed to OU students.
“We shouldn’t let the dealers or junkies on campus,” she said. “I really don’t think they belong here.”
Prepaid cards have costs that might not be obvious to cardholders at first glance. For instance, users must pay to activate a card or withdraw money from an ATM.
“Pre-pay your own plastic,” Thorne said. “You shouldn’t have to pre-pay MasterCard. Use your own damn credit card.”
The majority of college students already have some type of plastic in their wallets.
According to Student Monitor, a survey group that conducts annual research on the “college student market,” 62 percent of students in the U.S. have a debit card in their names, and 40 percent have a credit card.
Peter Williams, a senior studying music, said he does not see the value in the prepaid cards.
“I already have a credit card, so I wouldn’t be interested in a prepaid debit card,” he said.
Although students use credit and debit cards while in school, they are also accruing debt just by attending college. Seven out of 10 students expect to owe an average of $26,450 in student loan debt at graduation, according to Student Monitor.
Eric Weil, managing partner of Student Monitor, said he believes loan debt poses more problems for students than credit card debt.
“I think it would be a little disingenuous to say (colleges) want to protect students (by prohibiting marketers) when the real issue is the amount of student loan debt,” he said. “You have to be fair to the schools over the last few years.
There have been dramatic setbacks in funding from the government, which has caused a raise in tuition.”
OU officials have considered educating students on personal financing.
“Sometimes it’s not so much what you make, but how you budget it,” Smith said. “(But) if you do that through a class format, like AlcoholEdu, it’s very costly. Educating the mother population is more difficult, especially when finding a platform.”
Tyler Nay, a junior studying recreational management, said he could see the benefits of taking a class for personal financing.
“I think it’s a very good idea,” he said. “A lot of students have no clue what they are doing about their finances. As college students, that can be a really dangerous thing.”
sj950610@ohiou.edu
