Be Careful With Payment When Using Your College ID As a Debit Card
It is tempting the convenience of receiving student loan payments on a co-branded debit card / student ID card. But convenience comes at a price: Large overdraft fees can cost you thousands over the life of a student loan.
According to a recent study by the Center for Responsible Lending, 40% of college students who use a joint debit card / student card will pay at least one overdraft fee. Since we’re talking about student loan money, these fees can accumulate, tie up the money needed for books or other supplies, and most importantly, interest quickly accumulates.
When it comes to these versatile cards, the report suggests that students are aware of aggressive marketing messages touting the benefits and usability of such cards. These messages will often be posted on college letterhead and strongly recommend their cards to students. In many cases, exclusive partnerships between universities and banks only increase their bottom line at the expense of students.
Student bank accounts are often loaded with high overdraft fees | Responsible Lending Center via Credit.com