Over 700 colleges and universities have a contract with Higher One Holdings, Inc that have the ability to double student IDs into debit cards. A small group of concerned students and parents at Western Washington University is raising questions about the fees associated with the Higher One card, which can be used to distribute funds leftover from student loans and grants after tuition and other school expenses have been paid. The Higher One card has a number of fees associated with it, some of which aren’t typical of other bank accounts. Some of Higher One's OneAccount fees are 50 cents every time a PIN is used when making a debit card purchase, $2.50 every time the card is used at a non-Higher One ATM, a $20 fee to replace a lost card, and an inactivity fee of up to $19 per month if the account is not used for more than nine consecutive months.
There's even a link on each school's card web site: "How to use the OneAccount for free." Students must then click through three pages to read the fee schedule.
The most confusing fee? The cards are stamped "debit" on front. "THIS IS NOT A CREDIT CARD!" warns the website for Mt. Hood Community College's "Mountain Card."
Yet students who swipe the card as a "debit" and enter their personal identification number get charged a 50-cent fee each time. To avoid that fee, they must press "credit" and sign the receipt.
Do you know a student with this kind of card at his or her campus? If so, here are some useful tips:
•Read Higher One's fee schedule before you activate the card: Make sure you understand all the different ways you can be charged for using your card. Your cost will vary widely depending on which OneAccount choice you pick and how you use it. *Warning: It is 3 pages long!
• Try to figure out how you will use your card and review the fees: You may be charged a monthly fee depending on which Higher One account you choose. While the OneAccount comes without a monthly fee, you'll be charged $5.95 each month to use the OneAccount Flex or $8.95 each month to use the OneAccount Premier unless you meet certain criteria. You may also be charged for making purchases, making cash withdrawals, inactivity, or for using customer service to handle an issue that takes additional research to resolve.
• Take steps to reduce your fees: If you decide to get the Higher One Card try not to use non-network ATMs so you can avoid the $2.50 charge. You can also avoid fees by getting cash back when making purchases and checking your balance online or over the phone.
• Keep track of your balance: Be sure to keep track of your balance to avoid potentially high fees for charging more than the amount you have loaded onto your card.
• Beware of debit card holds: Do not use the Higher One card to purchase gas at the pump or for hotel charges or rental cars. If you do, you may be subject to an extended hold on your funds for more money than what you purchased.
• Your fees may vary depending on how you make purchases: Higher One has different fees for choosing PIN instead of signature, or for selecting the “debit” option instead of “credit” when you make purchases.
• Select your own bank account: You don't have to use the Higher One debit card. Choose to have your money deposited at a local bank or credit union that offers free or low cost checking accounts.
If you or a student you know has had an experience with a Higher One card tell us about it in the comments.