August 17, 2009
-
News: What's In It For Students?
Portions of the new credit card reform bill will take effect this week. Lenders will not be required to mail out credit card statements 21 days prior to the payment due date. They will also be required to provide at least 45 days notice of any interest rate or fee changes. But what about the college student; how will the new rules affect them? Students won't notice much difference this fall on campus because provisions pertaining to on campus credit card marketing will take effect in February 2010. Next fall those teaser freebies will go by the wayside and students will be left with fewer choices. It will also mark the end of aggressive marketing strategies targeting the vulnerable college student.
Exactly how will students be affected? To begin with, credit card companies will be prohibited from issuing a card to any individual under the age of 21 that does not have a source of income or a co-signer. Credit card companies will be prohibited from raising the credit limit on any account of an individual age 21 or younger or unless the co-signer approves such an increase. Additionally, colleges and universities will also experience some restraints and limitations regarding the collaboration of any card company marketing its products on campus. Some states have also implemented their own laws that will require colleges and universities to include financial education in new student orientation.
Will these new regulations prevent an individual under the age of 21 from obtaining a credit card? No. There will be many opportunities for many students to acquire card; however, most will be left to the discretion of a parent or guardian. Parents need to take the responsibility seriously or they could end up seeing their credit scores take a dive if their student fails to make a payment or is habitually late.