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2 Thursday, Junk 17, aoio | The Red a Black DEBT: College consumers line the pockets of Bank of America ► From Pago 1 accounts, said Tom Landrum, senior vice president for external affairs. That’s a little more than 5 percent of student-held affinity accounts. An affinity agreement is a mutual con tract between two organizations. At the University, credit cards in the affinity pro gram can be emblazoned with either the Arch or Uga. In 2006, Cynthia Coyle, executive direc tor of the Arch Foundation, signed an addendum to the agreement ensuring the organization would net at least $1 million per year as an advance against future royalties. At that time, the benefits of the con tract were transferred from the UGA Foundation to the Arch Foundation and will last until 2013. Coyle said once Bank of America pays the Arch Foundation, the funds are equally split between the Athletic Association, the Alumni Association and the Arch Foundation. "The Arch Foundation gets one-third,” she said. “We allocate it out immediately." The contract nets the University $1 per student card opened, plus 0.4 percent of all retail transactions. According to the contract, if the student has a balance at the end of every 12-month period, the University collects another sl. However, Debbie Dietzler, executive director of alumni relations, says that’s not the case. Dietzler referenced a 2006 addendum that she said no longer requires the card to carry a balance in order for the University to collect. “From my understanding, what they’re considering the renewal is not about the balance, rather [that it’s] an active card,” she said. But according to the 2006 addendum, no such change exists. “They are not making a great deal of money from that,” Landrum said. “We generate most of our funding from just the original agreement [not renewal fund ing].” The story is similar for non-student credit cards sl per account opened. 0.5 percent of all retail transactions and an additional $1 if a balance remains on the Pearls Before Swine® tv SremMt Pasra lin mm. tihcs. \to punish ;[mot to* having a urn / 1 1| \ siuvce. \ nt WHY WD THfY THtRFOE j BUTT THAT COMTHMMUY [ un I WCWTHC MOT sominuctoFine Isumcnmes, i simsnesTncHmeso \ L J bis scans HOM ID STOCKS V WtfDfWmON j 9CCP KTWCCN THC SOFA V > j SrA SUIT. / THIS. > v FWRTH6AWY j CUSHIONS THAT NO OMC CkSC / / V DBm MBBIMBMimni * [HH tUBBB MMB WHB MBMIi ' - 1 ~•• •’ ; j TJtfIMfTUTPOPOIITfIN t* WORLD CUP HEADQUARTERS! fL*:: 6/11-7/11 DOORS OPEN 7AM BRUNCH IS2 GUINNESS . W. 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Bond, James Bond, Inc. .Aa ■pV; • Bonds by phone • Student Discounts mESSSt Pearlel/zsion mm FOR GLASSES CALL 706-543-5788 or 1-866-543-5788 Mon- Sat 10-9 Sun 1-6 2 PAIRS OF SINGLE <t*QQ95 VISION (CR39) GLASSES INCLUDING SCRATCH COATING PROTECTION AND FRAMES TO $69" UPGRADES AT ADDITIONAL COST, exp 6-30-10 BEST CONTACT PRICES IN TOWN! WE WILL MATCH ALL COMPETITOR'S PRICES! 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Landrum said affinity cards were not originally created for students, but for alumni who wanted to show school pride ,and raise money for their university at the same time. “It really comes down to an adult rela tionship,” he said. “That in my mind is a responsible action by an individual who wants to help his or her school." * • * According to the contract, the annual percentage rate for a non-student mem ber is a variable rate of prime plus 7.9 percent and 9.9 percent for student mem bers. But Riess wrote in an e-mail “the rate on the Student Visa Platinum card is 14.24 percent plus Prime.” However, in documents obtained by The Red & Black, no change of the original rate was noted. The addendum states Bank of America will not have to pay the Arch Foundation the guaranteed $1 million if it is prevented from conducting at least five direct mail campaigns and three telemarket ing campaigns to the full list of members. According to the contract, Bank of America is permitted to hold on-cam pus promotions at major events, as well as at least seven home football games and three home basketball games. However. Riess said bank representa tives haven’t conducted tabling events “for some time,” and haven’t mailed infor mation to students for a couple of years. Landrum said that while Bank of America is still permitted to engage in on-campus solicitation —as long as it fol lows University guidelines and recent credit card solicitation laws its appear ance on campus “has been pretty spotty.” He added the majority of students who sign up for the cards do so at banking centers, not at Tate Plaza tables. In 2009, President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure Act, bring ing sweeping change to the way banks can solicit to consumers. According to the legislation, people younger than 21 would not be permitted to sign up for a credit card without a co signer or showing their means for repay ment. Additionally, the free gifts from banks 31 Easy to han dle 32 Troubles 33 Fishhook lure 34 Right side of a ship 35 Uncanny 37 Sicilian vol cano 40 Reel of yam 44 Cried 46 Grooved 48 Used profan ity 50 Blue-pencils 52 Cavalry sword 53 Rome's nation 54 Thick 55 Border FOR DOCTOR OR CONTACTS 706-613-6409 1-866-543-5788 Mon-Fri 10-7* Sat 10-6 Sun 1-5 GET A CONTACT EXAM HERE AND GET A COMPLETE PAROFGUSSES 50% OF NEWS to sign up for a card such as the ones used to entice students in Tate Plaza were prohibited when the legislation took effect in February. “It’s a good thing that they can’t really entice you into it,” said Ashley Puckett, a senior from Statham, adding the agree ment negatively affects her trust in the University. “It’s your own decision wheth er you want to get a card or not.” If Puckett were sitting in the same Tate Plaza location a few years ago as she was Wednesday afternoon, she may have seen tables of Bank of America represen tatives offering T-shirts, hats and Frisbees to students in exchange for filling out credit card applications. Puckett said she, too, found herself in debt to the tune of three credit cards. Now down to two due to her part-time job, she offered some advice to students tempted by creditors. “Don’t get more than one,” she said. “Don’t spend more than you can pay off.” • * • As debt among students increases, so does the amount the Arch Foundation receives from the agreement. For fiscal year 2010, the Arch Foundation netted $1,294,855.62 —a more than 10 percent increase from the previous year. The University netted $1,168,808 in FY 2009 and $1,013,048 in FY 2008. The money raised from the contract for the Arch Foundation goes into a non discretionary hind, and “every bit of it goes back into supporting the activity of the Arch Foundation,” Landrum said. One of those activities includes the President’s Club event, a $25,000 to $30,000 gala where they “invite those donors to the University of Georgia and we invite them to a reception and tell them how their funds are used,” Landrum said. John McCosh, spokesman for CredAbility, a nonprofit credit counseling organization, said it’s not necessarily a bad idea for students to have credit cards, provided it comes with a low credit limit of about SI,OOO. “Students are having more financial problems, just like everyone else is, in part because their parents are less likely to come to the rescue if there’s a prob lem," McCosh said. His advice for students create a budget. “If you start to get in trouble, buckle Fine toe)k>7 men... a | \ /Vutum t —JEWELRY • ART 125 LAST CLAYTON STRII I \ N H XX ,11,a,n Henry DOW \ I ( )\\ N • /()(>- > lf)- ( S82.() PR'iI.OIV HANPCRAHtB Ik ll# IIS* 56 Domed part of a cathe dral 57 Narrow val ley 59 Reverberate 60 Become dizzy 62 ■_ Got You Under My Skin' LOOK & LEASE SPECIfIt SAVE $138! HP Tart J jf ■ For more ir>Fo v P m J text "athen*" *JI '#**• 1 t 047464. JS ■* Wit . Standard rates *_ Sign a lease at The Lodge of Athens within 48 hours of taking a tour and well waive ail upfront fees. Plus, move in now and pay no rent until August! You will also be automatically entered to win a Dell Studio Notebook or Apple iPod ToUCh. LupnsSflMOlO b m . {/hi hj ! /i\Si /. ■ PFP.3P8.44P0 <1 i2r (hristus Vidor Lutheran Churrhand Student (enter MftWwmlOJOui Sdw/B<Wf Snay 9 !*i in •nnrdmasncwj* 1010 Soortloa*** Sow ?06-tt3)80l To advertise your worship services, call: 706-433-301 I • 3t* Ye tensions • fhri*Ye bedroom f bofWoom • SYuAy desks uiiHy skeWes • Gzt/ed drrYr*y • CompitEer \ab • fhrtaYe CrYwess cerrEcr • Baske/ba II f ✓olleuyfcztll • 7di/Mwfl bed • FdlLy fifrmsLed • CtiUftg Cztrts lx? bedrooms down and try not to carry these habits along later in life,” said McCosh, who said he often advises clients with tens of thou sands of dollars of debt who fell into bad financial habits in their teens and young 20s. McCosh stressed when someone charges a purchase on a credit card, they are taking out a loan. And like most loans, credit cards come with interest rates. “In this economy, a good [interest rate] would be probably the low teens,” McCosh said, adding the 14.24 percent interest rate plus prime from Bank of America’s student card is “not bad.” Riess said students in the Bank of America program will not see an increased interest rate for any reason, no matter what. “We take a fair and responsible approach to lending,” wrote Riess when asked to provide a statement regarding the University profiting from student debt. ”[A]nd, when we do provide credit cards to students under 21 who have the ability to pay or a guarantor with such ability, we have different terms and a strong educational component.” Other universities, such as the University of Michigan, have since made agreements with Bank of America to cease solicitation of affinity credit cards to students. While the University of Georgia has yet to formalize any such agreement, Landrum said he "would be open to dis cussing with Bank of America any adden dum." Meanwhile, Coyle said she received word from Bank of America that they are not “actively soliciting any student right now.” “We’re very concerned and very cau tious with our students they’re very strict about who they give a card to,” Coyle said, adding roughly half of student applicants are denied credit. But Landrum says the responsibility belongs in the hands of the person swip ing the card. “As far as the University profiting from the card because of debt, I don’t have any hard data on that,” Landrum said. “I see that as a part of a contract that is a stu dent’s decision as to whether or not that student wants to have a card, and wheth er they want to have a balance. I don’t see that as taking advantage of them." 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