Students at these 4 Canadian Schools Get Better Credit Cards Rates
Written by Cassandra Garnett
May 26, 2018 |
When it comes to credit card rates for school-branded cards, you should know which schools are getting the best rates. You would think all school branded credit cards are the same, especially if you focus only on Canadian Universities. After all, a Canadian student is going to have the same basic credit worthiness regardless of school, right? Wrong: 4 Canadian schools offer their students better rates than any other school in Canada.
Not All Students are the Same
When looking at credit card offers, issuers evaluate the neighborhood the student lives in, as well as the neighborhood of their parents. More affluent neighborhoods typically align with residents who have higher credit scores. Better credit scores mean that credit card issuers need to lower their rates to stand out from the competition (which is fierce).
Students from wealthy neighborhoods also have a greater likelihood of future employment and if things go badly for them, they are more likely to get bailed out by their parents.
Students who reside in a market known for higher rates of spending might also be targeted by credit card issuers because with a higher likelihood of carrying a balance, the greater the odds the issuer will earn interest.
Why Would One School be Different from Another?
Many issuers have agreements with schools to provide compensation based on the number of applications received from the student body. If you are familiar with affiliate marketing on the web, the arrangement these schools have with credit card issuers is almost identical. Schools that have more success with these programs leverage that strength into favorable Annual Percentage Rates (APR).
Schools that have larger student populations tend to have more opportunity to get favorable rates. The rate of participation in the program can also be a major factor. Smaller schools might qualify for better rates if a higher percentage of their student body applies for the school credit card.
Schools who get on the bandwagon early might have better rates. Credit card issuers may be willing to honor grandfather clauses that entitle the school to a better rate as a result of a long term relationship with the issuer. Schools have many options when it comes to endorsing a credit card, so no credit card issuer wants to lose a long term relationship over a small concession.
Who Qualifies for Better Credit Cards?
To qualify for a school credit card, you must be a student of the school. Credit card issuers will typically validate that the student number provided is valid for the school. Credit card issuers have an incentive to restrict access to lower rate cards because if you attempt to apply for a lower rate card and are not a student, the credit card issuer is - to a degree - losing money.
Having said that, you do not need to be a current member: alumni are always welcome. In some cases credit cards are specifically crafted only for alumni. By ensuring that alumni have access to the credit card, issuers aim to build a relationship with the student, so that as he or she encounters a need for additional credit (for things like a home or vacation) they will turn to the credit card issuer for a loan.
If you really want a school's credit card but you are not a student, one trick is to take an evening course: by getting a student number, you will qualify to apply for the card. Credit card issuers needs to exercise some diligence to make sure that their card is not available to the general public. But they rarely restrict access to full time students only.
The Canadian schools with the best credit card rates are listed below:
Athabasca University
0% promotional annual interest rate (AIR) on balance transfers for the first 10 months
These 4 Canadian School credit cards offer a better annual interest rate than all other Canadian cards by a minimum of 3% per year. The students of these schools benefit from lower rates due to preferred demographics of the student population, the size and participation rate of the school and the history of the relationship between the school and the credit card issuer. It goes to show that not all school branded credit cards are the same.
What about you? Do you think different schools should have different credit card rates in Canada?