Report: Students Should Beware of Campus Debit Cards

Report: Students Should Beware of Campus Debit Cards Photo (cc) by dewfall

College students need to do their homework before signing up for a campus debit card.

According to a recent study from Consumer Reports, many campus banking products have little transparency and high, varying fees that can end up costing students hundreds of dollars.

CR analyzed campus banking services offered by nine financial institutions, comparing their terms and calculating average costs. Consumerist said about 11 percent of U.S. colleges and universities have banking agreements with financial firms.

“We found that while some campus banking products offered simple, low-cost fee structures and convenient access to funds, others came with high or multiple usage fees that added up to significant annual costs for those who use their cards frequently,” the study said.

CR said heavy card users face up to $250 per year in ATM charges, overdraft fees and point-of-sale PIN fees. Overdraft fees of up to $38 a pop could be assessed.

So if the students aren’t reaping many awards in the campus banking arena, who is? More often than not, universities come out on top. Instead of issuing and mailing financial aid checks, the money can go directly onto the campus card, saving on administration costs. CR said:

Colleges and universities may enter into campus banking contracts that are more beneficial for their bottom lines than for their students, indirectly shifting fees associated with financial aid processing to students. Students may face limited choices and extra fees as a result of these relationships.

USA Today said campus banking can be very lucrative for universities.

Schools aren’t required to disclose their financial relationships unless they pertain to credit cards and private student loans. The few deals that are public show that schools are paid millions of dollars to market banking products.

What do you think of colleges benefiting from lucrative campus banking products? Share your comments below or on our Facebook page.

Popular Articles

These 6 Lifestyle Changes Might Help Prevent Dementia
These 6 Lifestyle Changes Might Help Prevent Dementia

Science says these practices can lower the risk of cognitive decline as we age.

10 Food Staples That Are Easy and Cheap to Make Yourself
10 Food Staples That Are Easy and Cheap to Make Yourself

Making any of these key foods yourself will improve your meals and your budget — not to mention your health, in some cases.

12 ‘Disposable’ Items You Should Reuse Rather Than Throw Away
12 ‘Disposable’ Items You Should Reuse Rather Than Throw Away

Are you throwing away money? Before tossing these items that are considered disposable, consider how to give them new purpose.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Trending Stories

Comments