Beginning in February 2010, it will become more difficult to get credit cards for those who are under the age of 21. That is because under the Credit Card Accountability, Responsibility and Disclosure Act of 2009, that restriction will be imposed on those who try.
The only exceptions for this are if a parent, guardian our spouse is willing to co-sign the application which makes them liable for the charges on the account as well. Or, there must be proof of sufficient income to meet the financial obligations of the card.
The fear is that before this law goes into effect in February, there will be a run to apply for and obtain credit cards since once one is issued, it will fall outside of the law's provisions.
In 2004, over 75 percent of undergraduates had at least one credit card. And now, that number is over 84 percent. Most do not pay off their balances every month and the median debt amount held by this group is $1,645 as opposed to around $950 in 2004.
Students in this age category show a clear need for guidance when it comes to using credit cards and paying their balances. Yet, one of the overriding protests to this law is that since they are able to vote, drive and enlist in the armed forces, they should be able to get credit cards, too.
The better course of direction with regards to credit cards and their used would be to educate about the merits of using them responsibly. But, ultimately, it is up to the students and their parents to make sure that their use of credit cards is based on sound logic and with forethought to the consequences.
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