Education Affinity Cards Have a New Twist

Credit cards that carry the image or logo of a favorite college pioneered the "affinity card" niche marketing strategy. Now there are some new twists on this old theme. Following the lead of co-branded airline cards which reward users with frequent flyer points, Citigroup has partnered with Upromise, Inc. (Brookline, MA) to issue a credit card that rebates a certain percentage of purchases to the cardholder's college education fund. The American Banker reports that dozens of merchants (including GM, McDonalds, and Exxon Mobil) have joined the program to pay a rebate on purchases made with the card. For example, tray liners at McDonalds suggest that its customers "take a bite out of college" by using the card.

Tuition points provide an intriguing alternative in a competitive, co-branded card market. John C. Grund, partner at First Annapolis Consulting (Linthicum, MD) believes that "cobranding has run its course to a certain extent. . . With garden-variety points and rebates programs, it is hard to differentiate oneself." Plus, he says that worries about the economy in general and air travel in particular may be making some consumers less interested in cards that offer them airline points.

Also following the education theme, First USA has cobranded a "Box Tops for Education" card with General Mills. The card allows users to designate the local school of their choice as the recipient of rebates paid for use of the card. General Mills has a history of promoting school rebates by encouraging families to cut out little cardboard squares from cereal box tops which can be redeemed (through their schools) for about 10 cents each. The American Banker reports that more than 65,000 of the nation's approximately 100,000 elementary schools participate. General Mills has given out $50 million to schools since it introduced the box-top program in 1996. Through its new partnership with First USA, General Mills will promote the Box Top card at schools as a way for parents to help fund local programs.