Alumni Credit Cards
Alumni credit cards are targeted to the alumni at University’s and college around the country. The cards are also solicited to perspective alumni, or those who will be graduating in the next year or next semester. Essentially universities make agreements with credit card companies. The University gets paid a fee for the service and the credit card company gains access to the University Alumni and graduation lists along with use of the University logo in order to promote the card.
As the number of marketing dollars spent towards existing students has declined due to new restrictions on the Card Act, banks have targeted university alumni and Alumni Associations to fill the void. There has been an 18% drop in new opened accounts from 2009 to 2012 for cards associated with Universities and colleges. The CARD Act was instituted in 2009, when the first declines were experienced. Much of this gap has been made up in the alumni card arena.
The top banks that issue Alumni credit cards include FIA which is the largest servicer of University Alumni Credit Cards. Chase Bank, US Bank, Intrust Bank, and Purdue Federal Credit Union round out the top five in order of total open accounts in 2012. FIA had total opened accounts of 983,670 with 26,566 new accounts. Chase had 83,390 total opened accounts with only 156 new account openings for the year, demonstrating they movement away from alumni cards.
Benefits of Alumni Cards
Donations. The biggest reason alumni utilize the alumni credit cards is to show loyalty to their Alma Martyr and to help the University. Most university cards offer automatic donations to the Alumni Association at their University every time you use the card. This provides both financial and physical support for the University.
No annual fee. Most cards no not charge an annual fee. This enables the cardholder to support your University with no down side.
Sign Up Bonuses. Look for sign up bonuses. This is generally in the form of a school donation or a set number of bonus points loaded on the card. Many bonuses are offered with the first purchase. If there is a spending threshold it is often low.
Earn points and redeem rewards. In addition to donations directed to the University, cardholders can also earn points on purchases that can be redeemed for gift cards or gifts. The points awarded are not as generous as some points programs, because the bank must also consider the university donation into the cost of the card.
Qualifying For the Card
Most of the University Alumni Credit Cards have several card options. This means the qualifications, credit limits and interest rates will vary depending on the applicant and their credit worthiness.
For those with excellent credit, credit limits can be as high as $25,000 and rates under 10%, making this a good card to have in your wallet. Each bank will have their own terms so it is important to check with your school or the school website to determine what is offered by your university.
Alumni Just Starting Out
Schools have credit card options that are targeted to recent graduates and soon to be graduates. These cards will have small credit limits, higher interest rates and lower reward options. The idea for these credit cards is to help college aged students build credit and learn to use the credit cards responsibly. As a result many of these cards offer financial guidance and money management tools that will help the student get started.
It is important to note when reading this advice that there is a conflict of interest. If you use excellent money management skills then the credit card company will not make as much from you in the form of both interest and fees. Tools and advice available online from a more neutral party might be the best source for advice. Yet overall, they provide useful tools for students who are graduating and just getting out on your own.
The cards are not usually exclusive for Alumni from the particular university. If there is a college or University that you wish to donate to, carrying a card with the school logo is one way to support the college. The cards are low cost cards in the sense of no or low annual fees and often low interest rates.
Banks who are in the business of Alumni credit cards will have different terms across banks and across Universities. It is necessary to check with the Alumni Association website. This is a common place for the Alumni cards to be promoted. Applications are generally available online and provide fast decisions.