Despite the CARD Act coming into implementation, colleges still have managed to make millions of dollar by signing up various credit card agreements. Just last year along, eighteen colleges in Tennessee, alumni associations and student groups made revenue of $1.8 million dollar through these agreements. The college makes money each time a student from their institution signs up for a student credit card.
According to reports from the Federal Reserve, $1.4 million of the $1.8 million was made by signing marketing agreements with Chase alone. Gina Stafford, the spokesperson for this university said that the money made by signing these agreements are used by the college to fund scholarship programs and various other alumni projects.
The contract with the University of Tennessee that has been in effect since 1998 is one of the most lucrative pacts in the country. Stafford also mentioned that the contract will expire as of 2012 and Chase does not have any plans of renewing it.
Though the university made a lot of money, the number of new credit card accounts saw a 21% drop in 2010 as compared to 2009. The records from Federal Reserve reveals that in comparison to 10,963 cards that were issued in 2009, only 8,702 cards were issued in 2010.
The number of student credit cards issued via colleges and universities showed a 17% decline nationally. The number of marketing agreements signed between banks and universities also fell by 4%, as per the data in the latest survey published by the Federal Reserve.
