The number of credit cards issued through colleges and alumni associates has declined, reflecting a 2009 law that limits the marketing of credit cards to undergraduates.
Last week, the Federal Reserve released a survey indicating that credit cards issued through colleges and alumni declined 17 percent last year, according to USA Today. The survey also showed that the number of marketing agreements between credit card companies and colleges, universities and alumni associations declined by four percent from 2009.
The 2009 Credit Card Act prevents students under 21 from obtaining a credit card unless they have a co-signer or are able to prove they can make payments.
Ed Mierzwinski, the director of the consumer program at the National Association of State Public Interest Research Groups, said that the 2009 law and increased transparency have led colleges and their trustees to avoid marketing agreements that involve undergraduates, according to USA Today.
According to the Fed’s report, college affinity cards are popular among alumni schools such as Penn State, the University of Texas, the University of Michigan and the University of Southern California.
The Cornell Alumni Federation received $904,575 from its marketing agreement last year, according to Federal Reserve data.
Cornell’s marketing agreement with Chase has changed over the years. Chase stopped using student mailing lists nationally in 2006, stopped on-campus marketing to students in 2007 and ended alumni-focused athletic marketing in 2008, according to USA Today.
Chase recently informed Cornell that it will no longer market the affinity cards, even to alumni.
Chase ranks third in college marketing with 28 agreements in effect. FIA Card Services ranks first with 848 and U.S. Bank Association ND ranks second with 54.
The marketing agreements allow the companies to pay many colleges and alumni associations more if customers carry more debt, according to USA Today.
The deals help alumni associations financially, but they "are not necessarily a good deal for a student without a job and without income," Ruth Susswein of Consumer Action said, USA Today reports.