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School is back in session and on many college campuses that -- a whole new batch of customers for the credit card industry to target.
When bank however is taking a different approach marketing debit cards with instant access to student loan money -- over 600 colleges nationwide.
-- my next -- says hey buyer beware without the luxury of interest rates higher one bank is in the -- game John alzheimer's the president.
-- education at credit card that John welcome to the CN.
Hey Jerry how are you nice to -- there all right so.
I we have the credit card active fixed everything and that you know all of this was supposed to be fair and we were exposed to see high fees what's going on with this.
Hah hah hah I'm slapping might need a beer cannon -- card act.
Here's the problem with the car that -- along what professional card for small business cards debit cards are also not covered by the provisions on the -- -- so what you end up seeing.
If you see still some forum on day.
Copy these issuers are on campus so there's a presence and they're still trying to stick these cards into the consumers -- because -- it's legal under the card act and be.
It's their way into your wallet it's -- in your wallet and now they can cross sell you for the credit card which does have an interest component of course.
Now and this is fascinating because now suddenly the college student has instant access to that college -- All of the time now what is this -- -- mean in the long run John.
Well here's -- -- this is my debit card the difference between this debit card and one of these other student debit card is this this park draws money directly out of my checking account.
The -- cards issued by higher one.
Draw money out of your student funds which means you can now pay four bucks which is fine but you can also -- -- shot glasses T shirts.
-- people that aren't here these -- MasterCard how -- their -- and look.
Don't don't underestimate the influence cheap beer on students this resonates with them we -- look at that and laugh at that as -- if it's comical were not being flippant about this this resonates.
What the twenty and 21 year old because it is a way to pay for things.
And not necessarily.
That the money is being drawn from student loans that's not the type of money you wanna spend on you know.
Get out and -- -- absolutely.
A -- talk about the fees associated with this card exactly that's what people are really complaining about.
And I was shocked to see there's an inactivity -- so if you don't use this card.
You get slapped with a nineteen buck in activity be what how -- how long to turn six months with how long -- inaudible worried.
You get hit.
It's nine months it's it's nine months and look here's the problem is it yeah you're almost damned if you're -- you're you're damned if you don't if you use it then then the -- -- interchange obviously.
If you don't use it in your charge that's nineteen dollar -- -- it's almost that they're saying hey welcome to campus now give me your money.
I'm an and that's not necessarily how we want students that's not the position -- want to put students and right now they're too many.
Horrible stories about students graduating with enormous amount of student loan debt which is now eclipsed credit card debt by the -- -- next to impossible to get out of this type of that.
It's fine if you understand that the -- is going towards higher education but it shouldn't be going towards things that are outside of true tuitions and support for terrorism like -- And exit -- for -- second there's a two dollar bid and fifty cent fee for using another bank's ATM.
So they are getting their money for it for giving you this -- obviously a fifty cent charge for using the pen and said.
The number instead of a signature.
He did this -- -- yeah I knew the credit card companies out there ready to come out quite another way to make money out of people I just didn't realize it would happen says since -- And what really shocks me is the money they're getting is money that has been borrowed.
So it's an even money you have to begin.
Write it and it's -- that's not only been -- but it's money that's been earmarked for tuition and for education look let's be really really clear about something.
Credit card issuers and plastic issuers are very very Smart they had been planning for card act missed compliance.
For a good twelve months prior to when act was actually signed by President Obama.
This is not shocking this is not anything -- and by the way we will be hearing got stories like this for the next 1224 months I believe.
And -- Elizabeth Warren does something to tighten up.
The Swiss cheese act known as the car -- this.
All right John Alzheimer thanks for your -- today appreciate it you bat my pleasure.
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