Wednesday, June 9, 2010


Geez. First of all, thank you to the thirty of you who have taken the time to follow me on this little Internet voyage. If you feel like the rantings get tired, there are 4 years of stuff to search. Start going back over the things you missed since you joined me and you might think I was either (a) funnier or (b) the same as now, only older and more tired. Either way, It's been an interesting time, and I wonder where my pent-up rants would have wound up if it weren't for the Internet.
I haven't written much about the big oil spill in the Gulf of Mexico. Partly because I figure that you're already aware of it and partly because I'm at a loss to describe how I feel about it. I think I said that it would make the Exxon-Valdez look like "a Bounty commercial," but it goes beyond that now. The thing I can't figure out is how BP didn't have a plan for a pipeline break. As a driller and a major player in the oil industry, you'd think that they would have devoted at least part of their operations manual to "what to do when the pipe breaks." At least I would think that, but I suppose guys making millions of dollars a year don't have to concern themselves with such mundane problems when they can just point their fingers at someone else.
Some of the nation's largest and most elite universities stand to gain millions of dollars from selling the names and addresses of students and alumni to credit card companies while granting the companies special access to school events, the Huffington Post Investigative Fund has found.
The schools and their alumni associations are entitled to receive payments that multiply as students use their cards. Some colleges can receive bonuses when students incur debt.
When I was in college, I remember seeing credit card applications plastered on the bulletin boards at gathering places, and I wondered, "How can these kids afford a credit card, and how can they even get one when some of them have no income?" How naive I was. What I failed to realize was that the very people who were providing me with an education were also profiting from the banks who issued the cards to their students. As though it wasn't enough to rape them for $50,000 a year for tuition, they had to include credit card fees into the equation.
For granting such access and information, schools can receive royalty payments based on the number of students opening accounts and the amount they spend, the contracts show. Most of the schools are entitled to earn more whenever a student carries a balance from year to year. Some consumer advocates question whether colleges participating in affinity agreements are failing to safeguard the young people in their care.
"Universities should place the welfare of their students as their highest priority and shouldn't sell them off for profit," said Ed Mierzwinski, consumer program director for the federation of state Public Interest Research Groups, or PIRG.
Obviously, it isn't enough to make kids and their parents pay through the nose for an education. Some colleges (mine probably included) think that it is necessary to profit from debt as well. Shame. That doesn't discourage the banks from rationalizing their actions...
The contracts call for a range of minimum payments by banks. At Brown, Bank of America agreed in 2006 to pay $2.3 million over seven years. At Michigan, the bank in 2003 agreed to pay $25.5 million over 11 years. The bank says it's not taking advantage of students; it's amassing new customers whose loyalties can span a decade or more.
"Our objective in serving the student market is to create the foundation for a long-term banking relationship," Bank of America spokeswoman Betty Riess said in an email, adding that the bank offers reasonable rates and low credit limits on student cards, and that it primarily solicits graduates and sports fans.
Of course, they're not taking advantage of students. They are merely acquainting them (or educating them, in college parlance) in the ways of the world. If they can't learn from mounting debt, what can they learn from?
The University of Michigan alumni association, facing growing scrutiny from consumer groups, says it reached an agreement with Bank of America to stop marketing to students in early 2008. Jerry Sigler, chief financial officer of the alumni association, said he made the decision begrudgingly.
"Managing credit is as much a part of education and maturation as anything else going on campus," he said. "Credit isn't bad, it's a reality."
The benefits are not always so obvious for students whose families already face soaring tuition costs and hefty loan payments. College seniors graduated in 2008 with average credit card debt of more than $4,100, up from $2,900 four years earlier, according to data compiled by student lending company Sallie Mae.
Well, at least the alumni association (emphasis on the "ass") has the students' best interests at heart, right? Sure, only after "growing scrutiny." There's a life lesson for you kids. And managing credit is a part of maturing, until it becomes too big to manage, which is where Bank of America and their cronies figure in. Books are expensive, so why not CHARGE it? At 20% interest, you'll learn quickly how to manage credit.
From a bank's perspective, students represent an important demographic: Not only do many first-time cardholders hunger for credit; they are likely to stay customers for quite some time - up to 15 years, according to a 2005 study by Ohio State University researchers.
"Student credit cards are hugely important to a bank," said Kerry Policy Groth, who negotiated collegiate affinity agreements as an MBNA account executive from 1998 to 2005. "Your first credit card is usually the one you keep."
It's the one you keep because it's the one you can never pay off. Never look at anything from a bank's perspective. It makes you cross eyed.
"Building a future customer--that was really the goal" of affinity agreements, said former MBNA executive Groth. "You're not out to gouge them; you want a positive experience."
But if you do gouge them, you're not going to feel badly about it, are you? After all, you're building a future customer - for the next 50 years until the debt is paid off. Thanks for doing us all a favor, you blood-sucking bastards.


DMBFAN said...

GLAD to follow... always awesome posts... make me think (hey, what's THAT :-))... have a great day you wonderful BLOGGER, you!!

Cliff Yankovich said...

The credit card companies have been doing this for quite some time at the schools. Never forget when my step-daughter informed us that she graduated with an $800 balance (that was the max, thank God)on her credit card we didn't know she had as an unemployed student! They went right into the dorms - door to door. Best part of the story - this happened at a very, very conservative christian school.