In the Dartmouth "Alma Mater," College alumni hold memories of their years in Hanover "in their muscles and their brains." Soon they may also keep them in their wallets.
Hundreds of colleges and universities around the country have negotiated lucrative contracts with banks, allowing them to market school-branded "affinity" credit cards to alumni. In many cases, the cards are also pitched to faculty, staff and the general public.
Now Dartmouth alumni and administrators are shopping around for a bank to team up with to offer a Dartmouth-branded card.
Affinity cards can be "a mark of pride, a conversation point," Vice-President for Alumni Affairs Stan Colla '66 said. He added that while no decision has been made to offer a Dartmouth affinity card, alumni officials have investigated the possibility.
"We have talked with banks to get information about these programs. We have evaluated their relative merits," he said.
One of those merits is their money-making potential for the College. Multi-year deals in the tens of millions of dollars are common for larger universities. Although a deal with Dartmouth would reach fewer people, Colla noted that the College's alumni are a desirable market.
"We may be able to get them to give us a special interest rate because of the constituency we're talking about," he said. "Dartmouth alumni are good at paying off debt. They're good customers for a bank to want to have."
The monetary details of a Dartmouth bank contract would remain confidential, Colla said.
Two banks, First USA and MBNA, are the leaders in courting colleges and universities. First USA now offers cards through 200 schools, and MBNA has deals with even more. Other companies like Citibank are also in the affinity card market.
The terms of schools' contracts with credit card-issuing banks vary widely, according to Colla. Some allow the bank to market the cards by phone, e-mail or via advertising in alumni magazines and web sites, while others limit the marketing to mailings.
"It's a negotiation," Colla said. "The bank has a lot of experience in marketing. They will give [a school] parameters, and the institution will come back with their own sets of limits."
Colla said that if Dartmouth enters into such a contract with a bank, the focus will be on marketing to alumni, but it "may include students as part of the target market. It also could include parents, friends or faculty."
That decision would likely be made by a committee of administrators from different areas of the College, which would also have to decide how it wanted the bank to market the cards.
Other schools have offered affinity cards for years. At Yale University, where a school-branded credit card has been available through First USA since 1997, there hasn't been a campaign to market it to students and few have applied for it, said Jeff Brenzel, executive director of Yale's alumni association.
That contrasts with institutions like the University of Notre Dame. Its alumni association's executive director, Chuck Lennon, said First USA has issued affinity cards to about 5,000 students since 1997.
Notre Dame's contract forbids the bank from marketing directly to students, however, and when students do apply for the card, they are presented with a folder of educational material about using credit cards responsibly.
A recent survey commissioned by the National Consumers League found that more than half of teens may not fully understand how credit cards work, even though 58 percent plan to get one by the time they graduate from college.
Statistics like those have caused some to call for better financial education and even new laws to protect younger credit card holders.
Lennon said Notre Dame administrators were wary of becoming a cause of student debt when negotiating the First USA contract.
One of the reasons Notre Dame chose not to allow the bank to solicit students was that "they already get bombarded with credit card requests," Lennon said. "To give them a $600 or $800 line of credit on multiple credit cards didn't make sense," he said.
One way in which Notre Dame differs significantly from Dartmouth is in the number of fans the schools' athletic teams have on a national level. About half of the 60,000 Notre Dame credit cards that have been issued went to non-alumni fans, Lennon said.
The university has an incentive to allow First USA to market to as many people as possible, since its contract provides for a percentage of the total amount charged on the cards to go directly to the school's general scholarship fund, in addition to a fixed yearly amount.
The lure of that bonus has led Notre Dame to allow First USA to market the school's card -- branded with its Fighting Irish logo and mascot -- directly to sports fans. Recently, Lennon said, First USA sent mailings to one million Sports Illustrated subscribers with Irish surnames. The yield: a one-and-a-half to two-percent response rate -- considered excellent in the industry, according to Lennon.
Whether Dartmouth would allow a credit-card issuer to adopt such aggressive marketing strategies remains to be seen.
Colla said the College does not currently provide alumni's addresses to companies except for "Dartmouth-related purposes," a category under which he said he would classify an affinity credit card offer.
Colla noted that there have been instances in which the College alumni directory has been misused as a commercial mailing list. He said the alumni office investigates such cases by seeding the directory with fictitious people whose addresses lead back to staff members.
"One former College counsel used to list his dog," he said.
Dartmouth likewise does not make the on- or off-campus addresses of its students available to companies, although those addresses are also a matter of public record, Senior Associate Dean of the College Dan Nelson told The Dartmouth.
But Colla did not rule out the possibility that an affinity credit card would be targeted toward students through direct mail.
"Ultimately, Dartmouth students become Dartmouth alumni," he said. "We'd like to start a relationship with them that reminds them of Dartmouth, and [an affinity card] would be a nice relationship builder."
Colla said he envisioned some form of financial-responsibility education for Dartmouth students, presented in a collaborative effort by the College and its partner bank. His office is looking for "a bank that would be supportive of students and would talk to them on an individual basis if they start to see red flags," he said.
One source of credit card advertising in the Dartmouth student's daily life is the bookstore shopping bag. Bags from both the Dartmouth Bookstore and Wheelock Books often contain promotional offers. Both stores buy the bags from wholesalers at a reduced cost in exchange for allowing advertisers to pre-stuff the bags, store managers said.
At the Dartmouth Bookstore, manager Dave Cioffi has noticed an increase in student credit card use in past years.
"We're finding kids with more than one card," he said. "If one is declined, they whip out another one."
From Cioffi's point of view, the increase in plastic has been a boon. The store once offered student debit accounts, but has long since discontinued them.
"We had problems with people not paying their balances," Cioffi said. Now, with the rise of credit cards, the store knows it will be paid. "It's a blessing for us," he said.
Whether it's a blessing for students is up for debate.
"For good reason, people want to be concerned about creating situations that get people into trouble," Colla said.
Students will obtain credit cards "whether Dartmouth does anything with a bank or not," he said.
"People need to have credit cards. For those that want that opportunity, this would provide them with it."
