COLUMN: Just charge it to my PennCard

From David Brown's, "How It Works," Fall '97 From David Brown's, "How It Works," Fall '97 All with the swipe of a card. Buying books at The Book Store, food at Chats and in the future doing laundry and eating at restaurants. Many students purchase goods solely based on convenience, especially if the store is easily accessible or has a cashless payment method. Once they turn18, students are bombarded with credit card solicitations and can attain thousands of dollars in purchasing power without an income. Often students are added to their parents' credit accounts with higher spending limits. Those with a cash allowance can use their parents' credit cards to beat them and charge at every chance to have more cash. Spending is simple with plastic -- currency never crosses the table, just a signature confirming the transaction. Automated teller machine cards cause trouble since they are addicting. Run out of cash, hit the ATM and your wallet is filled minutes later. The numerous ATMs around campus allow 24-hour access, without requiring work, or caring where the money comes from. PNC Bank owns all on-campus ATMs and had held out in charging a transaction fee. Now, with all ATMs costing a dollar for foreign account transactions, students are hesitant to withdraw money. This leads to even more expenditures on the PennCard. PNC is involved with the new debit feature, and assumes students will want to avoid ATM fees and use this new PennCard -- channeling more money to themselves and the University. Students' carefree nature is crucial for the University to proceed with additional PennCard spending capabilities. The option to charge directly to their bursar bill leads many to buy books at The Book Store, although they are aware cheaper books are available at Campus Text. But many know they will never see their bursar bill as it disappears home to their parents. This oblivious attitude can lead to reckless spending, easily shown by the popularity of Chats. Approximately 75 percent of its business is PennCard charges, capitalizing on simplicity. Recently, this purchasing power was expanded to campus commissaries, where sales have increased 20 percent since implementation -- PennCard charges account for about half of sales. With this success, University marketers desired another way to simplify students' spending needs. The new PennCard will have debit capabilities and create a "cashless campus" where students may be safer. Unfortunately, I doubt many criminals will be experiencing sleepless nights -- "Those rich students are packing microchips on their PennCards, guess they're worthless now." This is a fallacious assumption, since the card contains a cash value that can be spent by anyone using it. This additional purchasing power could even make students more vulnerable. Of course, if students have common sense to call the Penn Police and cancel their card, their loss would be minimized. Even if students' purchases were ensured, the expensive clothing, jewelry, electronics and cars many own are still highly desired. Penn being a "cashless campus" is just a marketing scheme. Is it any coincidence these plans (which have been going on for years) were finalized days before acceptances for the class of 2001 were mailed out? The University continues to stress its drop in the overused U.S. News and World Report rankings, and must improve its admissions statistics to maintain its ranking. With a decline in applications and adverse national exposure due to last semester's crime, a solution was needed for the affluent parents of prospective freshmen. If naive parents can accept the new PennCard as an answer to "What is being done to improve safety?" on every campus tour, then why not exploit their stupidity. But, this was never a plan for the students. Laurie Cousart, chair of the Campus Card Steering Committee, sees the new PennCard "as a service to the Penn community, but if as an added bonus it will increase safety, that will be great." Executive Vice President John Fry is more in line with the University's primary intention to make money and exercise more control over students and local businesses -- he sees the arrangement generating new revenue of about $6 million over five years. Commercializing the PennCard will bring in additional profits from possible phone card capabilities and local businesses. Since students love spending with their PennCards, stores and restaurants will be forced into contracts, paying a percentage of their sales to the University. Businesses will need to raise their prices to cover costs, making on-campus establishments more attractive. Besides taking a fraction of off-campus revenues, the University can dominate these shops since the threat of removing PennCard access would mean an imminent loss of student customers. This new program coupled with ATM fees and students' love of using plastic will only further deteriorate financial responsibility. To aid in spending, Student Financial Services will raise the PennCard's credit limit to $1000 next semester, up from $750. Why withdraw cash when transferring money to the PennCard for debit purchases, or using its credit capabilities will be free in the eyes of the user? When spending cash, there is some reservation. However, plastic thrives on getting what you want when you want, regardless of cash in hand. With such access, financial obligations can easily be disregarded. The nonchalance attitude of "the bill's going to my parents, I don't care," pervades campus. Maybe students can get away with not paying their bills now, but eventually our parents will not settle our debts. Managing money is essential to success, and the poor financial decisions made by students will only increase with the University's new PennCard.