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By Iris Taylor
Q. How do you know when you’ve reached a college campus?
A. When you see all those tables staffed by people hawking credit cards to students.
In the spring semester, that scene will change, though.
Once the new Credit Card Act takes effect in February, 2010, credit card companies can’t provide a student under the age of 21 a credit card unless the student has a co-signer over age 21 who has the means to repay the incurred debt.
Or, unless the student cardholder can furnish proof that he or she can independently make the payments.
Also, card issuers can’t come on campus or to a college-sponsored event and dangle those cool freebies, like an iPod, intended to induce the student to apply for a card.
And, students will have to look harder to get a card; the number of locations on campus where card marketing can take place will be limited.
It’ll be tough on financially responsible college students, said Bill Hardekopf, CEO of LowCards.com.
They will find it harder to get a credit card and start building a credit score, he said.
Lenders, employers and apartment managers look at credit scores to assess whether to extend a good interest rate, a job or to rent a unit, he said.
On the other hand, college students’ average debt keeps rising, he said.
Parents should teach college students how to correctly use a credit card. “If parents don’t teach them, the young adult will be forced to learn from their own mistakes.”
What else will credit card issuers have to quit doing when credit card reforms kick in? Click here: Credit-Card Industry Faces Uncertainty as Reforms Loom.
