Act Keeps Credit Card Firms Off Campus, Away From 21-Year-Olds
For years, banks have set up booths on college campuses, hawked T-shirts and given away food to students if they would fill out a credit card application.
"Issuers have aggressively marketed cards to college students because they know that many parents will pay off the bill if the student runs up debt," said Bill Hardekopf, chief executive of LowCards.com. "In addition, brand loyalty is determined early in life, so many young cardholders keep their first card for many years."
But some students who got a credit card didn't know how to manage the credit and got themselves deep into debt. A recent study by Sallie Mae, the nation's largest student loan lender, found the average credit card balance for college students has grown to $3,173.
But starting in February, it will be harder for students to get credit cards.
That's because the Credit Card Act passed this spring will prohibit credit card issuers from lending to anyone under the age of 21 unless he or she has a co-signer or has proof of their ability to make payments.
In addition, unsolicited card offers will be prohibited to everyone under 21, and credit card companies can't entice students into signing up for a credit card with any tangible item anywhere on or near a college campus or at a college-sponsored event.
Source: Dallas Morning News