The constant stream of free beads, T-shirts, foam fingers and flying discs pouring in from credit card companies will be absent from the Hokie football experience this fall.
The credit card representatives who flock to many campus sporting events offering students the chance to support their school by opening up an college affinity credit card are now banned by federal law.
"We never allowed an organizations to solicit on campus," said university spokesman Larry Hincker. "They always had to work in concert with one of our organizations such as an alumni group."
President Barack Obama signed the Credit Cardholder's Bill of Rights Act of 2009 into law on May 22 as an amendment to the Truth in Lending Act that established fair and transparent practices relating to the extension of credit under an open-end consumer credit plan.
Credit cards were often advertised to students around football games.
Affinity credit cards allow students an opportunity to support their school, even by swiping their credit cards at the grocery store. These cards offer to donate a portion of the purchases on the card to the institution, offer discounted terms to the consumer and sport the logos of the institution on the card.The new bill formally defines these accounts as "a credit card issued by a credit card issuer under an open end consumer credit plan in conjunction with an agreement between the user and an institution of higher education, or an alumni organization or foundation."
Virginia Tech Alumni Association currently holds a contract with JPMorgan Chase, according to Vice President for Alumni Relations Tom Tillar.
Chase, however, has ended their affinity card plans in accordance with this new bill.
Tillar said the alumni association's contract with Chase prohibits him from disclosing the value of the agreement. Contracts at other universities range from $1 million to $20 million and give credit card companies access to alumni contact information, as well as the right to market to them.
Tillar said existing cards are not affected by Chase's change.
"If you hold a card right now it will still be good and will work, but they have stopped accepting new applications," Tillar said. "They are only keeping their Disney affinity cards because that is a global organization."
The bill has banned giving out free gifts to students as incentives and has prohibited credit card companies from providing credit cards to students under the age of 21 without consent from a parent or guardian.
Credit card companies are still allowed to market toward alumni with an established annual gross income.
"I believe at last count we had in the mid-20,000 alumni with Virginia Tech affinity cards," Tillar said. "It does provide people with a way to support their school.
Some consumer advocacy groups, such as the Consumer Federation of America based out of Washington D.C. have called into question the relationship between these companies and universities."
The CFA is concerned that the relationship is a conflict of interest and does not have the best interests of the cardholders in mind.
Irene Leech, an associate professor in apparel, housing and tourism management, is currently the vice president of CFA. She has been raising questions about the credit card policies at universities, specifically at Tech.
"It is so important for students to start off on the right foot when it comes to their credit score," Leech said. "We should be encouraging them to act responsibly, but what's been happening is students have been enticed into using credit cards with programs that aren't going to benefit them in the long run."
The plan that students, alumni and staff signed up for with the affinity cards included "double-cycle" billing, where interest is calculated over two months instead of the normally standard one month. This process often results in higher finance charges.
The new bill prohibits double-cycle billing when the monthly payments are made on time. Chase dropped double-cycle billing in early-2009 following the decision not to continue with the university affinity cards.
"They saw that is was costing them too much to keep the program running," Tillar said. "They just weren't seeing enough profits."
Most of the marketing for affinity cards was aimed at alumni, explaining why Chase, Bank of America, MBNA and FirstUSA mainly deal with alumni associations.
"We don't have many students who were issued cards; it's a very small number," Tillar said. "(Chase) mainly likes to market to college graduates because they are a good credit risk. They often make all of their payments on time."
Leech said the positive side of the credit cards offered to students through universities is the ability to learn how to build a credit score.
"This society depends on credit, it is incredibly important for students to learn how to properly use credit," Leech said. "It is very beneficial to learn while in college how to manage credit."