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Not all alumni cards are created equally

Kelly Dilworth

If you’re proud of your alma mater and like showing off where you went to school, a university-affiliated credit card could be a tempting option.

Proceeds from the affiliation often go directly to university alumni associations. So toting a university-branded card could help your school raise much-needed cash. It might also help ease your guilt each time your university alumni association asks you for donations.College card marketing

But before you fill out an application, be sure to read the terms closely. Just because your university’s alumni association is promoting a specific card doesn’t mean the card’s been fully vetted. Many alumni associations align themselves with specific banks or card issuers because of practical or financial considerations, such as an attractive royalty bonus each time an alumnus signs up for a new account. They don’t necessarily choose the card with the best rates or consumer-friendly terms.

Consumer advocates have sharply criticized campus card agreements because it’s not always clear why a particular card is being pushed. The Credit CARD Act of 2009 requires universities to make financial agreements with banks or credit card issuers publicly available. But according to the CFPB’s latest report to Congress, many universities have failed to post the agreements to their websites. They’ve also failed to make it easy for consumers to request a personal copy.

If you’re curious what kind of financial deal your college has struck up with a particular bank, you can check out the CFPB’s college credit card agreements page. Each year, the CFPB collects the financial agreements between universities and affiliated card issuers and posts the agreements to its website. However, if your alma mater isn’t fully compliant with the CARD Act, you may be out of luck.

Some alumni cards are better than others
Because college credit card agreements are typically exclusive, you can’t shop around if you’re set on carrying a university-branded card. Alumni who opt for a college-affiliated card are stuck with whichever financial institution negotiated a deal with their university or alumni group.

However, it’s still a good idea to compare the college card to comparable credit cards from other banks and institutions. That way, you’ll have a better idea of whether or not the alumni card is worth applying for.

For example, many college card agreements are affiliated with Bank of America and offer a card that’s essentially identical to Bank of America’s lackluster cash-back card, the BankAmericard Cash Rewards card. The card’s APR range, which starts at 12.99 percent and tops out at 22.99 percent, is wide, making it tough to guess whether you’ll be offered an affordable rate. Meanwhile, its cash rewards program is significantly less generous than many of its competitors.

Other college card agreements are more attractive. For example, MIT’s Platinum card and the University of Utah Visa Rewards card both offer an APR as low as 8.99 percent, which is one of the lowest rates you can get on a credit card. Similarly, the Harvard Alumni card and the Georgia State University credit card offer rates starting at 9.99 percent. So you may be able to find a better deal on a credit card by expanding your search to other university-affiliated cards.

Just be sure to read the card’s terms before you apply and think carefully about how often you’ll actually use it.

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