April 17, 2010
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News: Teaching Credit Card Sense To Students
College students and young adults have become the hottest target for credit card companies. Each year the average credit card debt of college graduates increases. New legislation which became effective in February is aimed at helping students from falling into the credit trap. The law prohibits lenders from participating in aggressive marketing campaigns on college and university campuses. It also prohibits lenders from issuing a credit card account to any individual under the age of 21 unless that individual can prove the means to repay the debt or have a co-signer. Lenders are also banned from offering students promotional gifts in exchange for completing a credit application.
New legislation also prohibits lenders 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. Although the law aims to protect students under the age of 21 from the predatory practices of the credit card industry, its protections are inadequate. That's why educators and concerned parties in Louisville, Kentucky will be launching its Credit Abuse Resistance Education (CARE) presentation this spring for all high school seniors. The class will be present free of charge and focuses on teaching students how to manage money and avoid the credit card trap.
The class will focus on graduating high school seniors who will be off on their own within the next few months. Student will learn some valuable skills on money management and will become familiarized with the new credit card rules and how they will affect them. Experts are also advising parents to take the new rules seriously as well. If they co-sign for their students and he does not pay, new legislation will hold them accountable which could have a diverse affect on their credit rating.