New Credit Card Rules for College Students |
By Jonathan Boral on February 22, 2010
.jpg.aspx?width=75&height=75) The Credit Card Accountability, Responsibility, and Disclosure Act of 2009, recently signed by President Barack Obama, is set to take effect in February of 2010. The main purpose of this Act is to give banks and lenders far less power over the general control of interest rates, along with hoping to make borrowers far more knowledgeable about owning a credit card.
Some of the specific tasks the Act implements that affect college students include the banning of retroactive interest rates except when cardholders are more than 60 days late paying a bill. Also, credit card companies are no longer allowed to issue cards to anyone under the age of 21, unless they have a co-signer or proof that they intend and are able to pay off the bill. Lastly, college students must receive permission from parents or guardians to increase their spending limit if the guardians are co-signers.
Overall, while there may be an aversion to these new policies from college students, in the end, they are being protected. In the past decade, credit card companies have stepped up in their assault upon college students and universities, tricking new signers into believing they have far more power than they truly have. The new terms within the Credit CARD Act do make it more difficult for college students to obtain a credit card, but it is also protects them in the long run.
The Act does not make it impossible for college students to obtain credit cards; they merely must prove that they have the intent to be responsible with that card. While credit card companies have increased their interest in college students, they also know college students tend to lose their responsibility when it comes to buying high-price items.
In the end, the benefits of the Credit CARD Act outweigh the negatives. Many college students do not have the need for a credit card, and this Act goes to stop those not responsible from applying. On the other hand, those who are responsible now are more protected by the Government from receiving unfair interest rate hikes, along with receiving more knowledge about their credit card contract, in the end lending a helping hand to many young credit card holders.
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