Though many students might think that having a student ID that doubles as a debit card is a great idea, they should pay attention to the rates they are charged, as the university might not have the students’ best interests in mind.
USA Today’s article, “Colleges’ debit-card deals draw scrutiny,” written by Kathy Chu, points out the profits many schools make from encouraging their students to use these cards. It notes that universities don’t always partner with banks that will give the best rates to students. Focused on their profit, they abuse the trust students put in their institution and mislead them into thinking they are getting a good deal.
The article also highlights the disproportionate fees college students pay for overdrawing their accounts compared with average adults. Using their debit cards for small purchases, they are often unaware that there are not sufficient funds in their account. One student in the article paid $150 for a coffee because he was slammed with excessive overdraft fees.
If colleges partner with a financial institution and make it easy for students to sign up, they should at least offer the students with the rates of competitor banks so the choice is up to them. As tuition prices skyrocket, why have your students paying more for their everyday expenses?
This is just another example why people should always pay attention to the fine print. For more, check out a Public Citizen report on the lengths credit card companies will go to get the upper hand on their customers.