Students now able to apply for Tufts credit card

Now students and alumni alike will be able to show their financial support for Tufts by using a Tufts-branded credit card.

The Alumni Association (AA) announced last Friday that the cards, previously only for alumni, would be available for students.

The Tufts credit card is the result of a partnership between Tufts and the MBNA America Bank. The AA's decision to allow students to apply for it was detailed in a University-wide e-mail sent out last Friday.

Senior Alumni Relations Officer Jonathan Burton said the decision is "part of an overall campaign to educate students about the financial process. We know students will get credit card endorsements from elsewhere, so we thought 'why not extend the opportunities for education?'"

Education about the credit process will be supplemented, according to the plans of the AA, by regular information sessions jointly sponsored by the AA and MBNA. At these workshops, steps and advice for financial planning will be detailed. Credit card holders do not have to attend these informational sessions.

The bank will play as large a role as the AA in the educational aspect of the card. James Donahue, spokesman for MBNA, says that "educating students on how to make credit work for them instead of their working for credit is something we invest a lot of time in."

With the Tufts credit card, students would also have more insight into what happens with their money, Burton said. According to Donahue that the close affiliation between the University, specifically the AA, and the bank is a "point of leverage," by which card holders will presumably have more influence over their credit process.

Burton said that there is an added "level of responsiveness" in this system, as the bank is obligated to answer to the University and vice versa. "It is not," he says, "just a faceless company anymore." If students have problems with their cards, they have the University to complain to. According to Burton, this direct partnership also serves to minimize fraud.

An additional benefit of this partnership to the University is that it has a royalty relationship with the bank. A portion of money spent on retail purchases is returned to the AA. "This additional revenue stream gives the AA additional funding for student activities," Donahue said.

The funds gleaned from this program have already gone to the creation of a full-time position in Career Services, the alumni career services coordinator.

Issues have been raised, however, with the timing of the introduction of the credit card. Freshman Phil Mattia said, "Most students I know who were going to have a credit card already have one." Even though he is a freshman, Mattia made the transition to financial independence long ago.

Burton offered an explanation for this apparent poor timing. "It was delayed because we wanted to be sure that students' private information, like e-mail addresses, was not released to MBNA," he said. "Tufts wanted to market the card itself, and this process just took a little longer to do."

Burton expects that MBNA will see a five to ten percent increase in subscriptions for the Tufts credit card with the addition of student applicants.

Despite the AA's efforts, most students seem indifferent to the idea of the card. Sophomore Jacque Silva says that she will not get the card. "I already have a credit card," she said, "and it just seems like a hassle to get another one."

Students also argue that this credit card is just another way for the University to make money.

"I pay $40,000 a year to come here. I think that's helping Tufts enough," said Mattia.

Those students who decide to apply for the card should not take for granted that they will be accepted. "The majority of cards are granted to alumni," Donahue said. "We turn down more student applications than we approve, and those who are approved receive a significantly lower credit line than an adult applicant would."

Still, Donahue calls the idea that students are financially irresponsible customers "anecdotal." He says that more attention is paid to the cases of students who could not pay back their debts, but that in his experience "students who have and use credit cards are as responsible in the handling of those cards as anyone else."

The average balance on a student card is $550, which, according to Donahue, is one third the size of the balance on the cards of college-aged customers who are not students, and one fourth the size of the balance on alumni cards.

Credit card companies "take an educated risk on a student," says Donahue. "We assume that the student will probably move on to bigger and better things, and we try to establish a lifelong relationship with that person to help them do so."

Over 700 colleges and universities have alumni credit cards with MBNA, the world's largest independent credit card issuer. Only a small fraction of these, including Columbia University, allow their students to apply as well.