Recently our summer Financial Peace University class came to a close. Each week towards the end folks were bringing their credit cards and cutting them up in front of the class so we could all celebrate together that we were letting go of the credit card bondage. The folks in this class had some incredible stories and it was awesome to see the freedom achieved for so many. Check out Tom's post on our final class here.
I ran across an article online about the dirty secret of credit cards on college campuses that Tom shared on his blog. They have a target and know exactly who to go for. This story blew me away. Here's an excerpt...
It was three years ago and Irene Leech still remembers the shock clearly. An associate professor at Virginia Tech who specializes in consumer affairs, she read the terms of the credit card that her school, together with JPMorgan Chase (JPM), was marketing to students, alumni, and staff. Behind the card's shiny surface, featuring the football stadium at sunset, the so-called "affinity" card offered some of the most unfavorable terms around for card users. Among other things, the card had what's known as "double-cycle" billing, where interest is calculated over two months instead of the typical one, resulting in higher finance charges. "I was shocked," she says.
The experience convinced Leech that it was time for her to take a stand. First in a limited way and now more broadly, she has been speaking out against the conflicts of interest that universities face when they strike business agreements with credit card companies. Chase ultimately dropped double-cycle billing on the Virginia Tech card, as it did for all cards earlier this year. But Leech warns that schools that get money from credit card companies through affinity contracts or other marketing agreements face intractable problems, in which the school's financial interests are in direct conflict with those of students and alumni. Read the full article.