College students have long been attractive prospects to credit card issuers. While they typically lack any credit history, they are expected to increase their income over time, and are likely to keep using whatever card they acquired in college. Credit card companies hope to establish long-term relationships that will last through graduation and upward mobility. To reach these prospects, some card issuers enter into “affinity” marketing agreements with universities. Increasingly, however, these agreements are coming under scrutiny.

Affinity agreements are important sources of revenue for universities, which typically receive an upfront multimillion dollar payment as well as a set fee for each student, alumnus or faculty member who signs up for a card. The contract might be worth nearly $20 million per year to a university. In return, the card issuer receives marketing opportunities that include football games and other school events, as well as access to rosters of students, professors and alumni. The issuer can also co-brand the card and its marketing materials with the university name and logo.

Affinity agreements have been criticized due to concerns about the level of debt college students are incurring. There have even been student suicides that were apparently attributable to anxiety over excessive credit card debt. Nellie Mae, a subsidiary of Sallie Mae and provides loans for higher education, found in a 2005 report that the average outstanding balance on undergraduate credit cards was $2,169. But that figure was actually down 7% from the previous study in 2001. Nellie Mae’s study concluded, “Students should not be banned from access to credit cards, but they should be encouraged to learn how to use them wisely… The fact that average credit card debt has in fact declined in the past year is reason to be optimistic.”

Some states have begun to crack down on affinity agreements. State laws vary from limiting or prohibiting marketing on campus, to requiring financial literacy programs or requiring that universities develop on-campus marketing policies. Industry representatives counter that most students already understand how to manage their credit card debt, and that using a credit card is an important step in establishing financial discipline and a credit history.


General Accounting Office, College Students and Credit Cards (2001).