New Credit Card Accountability Act will restrict college students’ ability to be approved for credit cards
On May 22, President Obama signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009. Most importantly, the new act will prohibit issuance of:
- a credit card on behalf of a consumer under age 21, unless the consumer has submitted a written application meeting specified requirements
- certain affinity cards to students unless certain requirements have been met
According to Obama, the act will: clean up credit card practices for young people at universities. The act contains new protections for college students and young adults, including a requirement that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.
For college parents, this means that students will no longer be able to sign up for a credit card in order to get a free University t-shirt. It will be very difficult for students under age 21 to obtain a credit card. In most cases, parents will be required to co-sign/guarantee any credit card application.
I’m curious to learn what this will mean for the current generation of college students. On one hand – I think its positive that students will not be able to sign up for a credit card just to receive a free gift, like a t-shirt or a cooler. However, what will happen to the students who wanted to responsibly build credit, but do not have access to a credit-worthy co-signer? For tips to help students build credit early – check out this post from mint.com.
For more information, check out: http://www.govtrack.us/congress/bill.xpd?bill=s111-414&tab=summary or http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/