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Cards On Campus

It's no secret that credit card companies have as big a presence on a college campus as the dorm rooms. They are very aggressive in marketing their product to naïve kids who are experiencing that away-from-home freedom for the first time.

And they fork over big money for the privilege. As a whole, credit card companies paid $83.5 million last year to colleges, according to the Federal Reserve.

Let's break that down even further. For example, in the state of Tennessee in 2009, 21 institutions took money from credit card companies. Check out who paid what to get where.

  • The University of Tennessee made $1.4 million from Chase Bank so they could market a UT-themed card (this was one of the eight biggest contracts in the country last year).
  • Middle Tennessee State University got $75,000 from Chase.
  • The University of Memphis received $200,000 from FIA Card Services, a subsidiary of Bank of America.
  • Tennessee Tech University’s alumni association took more than $101,000 from FIA.

UT system spokesperson Gina Stafford said the university took measures to make sure that Chase isn't preying on students. The university put up a bunch of stipulations that dictate how, where and when Chase could work.

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But you have to remember something: If plastic companies weren't interested in marketing to students somehow, they wouldn't work so hard to get on campus. If rules are put in place, card companies will look for creative ways to get their message to students.

If you have a child who will soon be headed to college or is already there, it's absolutely crucial for them to not fall for the plastic pitch. They'll get offers of a free campus T-shirt, or a free pizza, or something else small. It doesn't seem like they're doing much to get it; just signing a piece of paper to get a credit card in the mail. But that's where it starts.

Once you have a card in hand, it can be very tempting to buy something small with it. Spending $10 here or $15 there won't get me in trouble, they think. But many students aren’t careful, and those purchases add up. When they leave school, it might be with thousands of dollars in credit card debt at a high interest rate, and they haven't even found a job yet!

Teach your child to only spend cash and live on a budget. It keeps a lot of stress and money struggles from entering their lives. They don't need a card, and they don't need to build their credit. However, they do need to live on less than they make. They'll thank you for it later.

We believe budgeting should be easy and, dare we say it, FUN! Give every dollar a name and focus your money on what matters. Meet EveryDollar, Dave's free budget tool.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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