Tougher Rules for Young Credit-Card Applicants

By Pam Robinson

Jun 9, 2009 7:00am

ABC News on Campus reporter Michelle San Miguel blogs:College-age students will face challenges when they apply for a credit card next year.  The Credit Card Accountability, Responsibility, and Disclosure Act contains new guidelines and restrictions that will help protect consumers under the age of 21 from accumulating excess debt.  Beginning in February 2010, consumers under the age of 21 who are looking to get a credit card need  a cosigner over the age of 21.  The cosigner has to be willing to accept financial responsibility for the underage consumer.  Youlonda Copeland-Morgan, associate vice president for enrollment at Syracuse University, believes the act is beneficial for students.  “Clearly it’s designed to protect the younger individuals who are not as sophisticated in borrowing and who do not understand the ins and outs of borrowing.”  While there are critics of the new law, Mckenzie Miller, a 20-year-old senior exercise science major at Syracuse University, thinks it’s a good idea.   “I think it’s beneficial because when I got my first credit card my mom and dad were with me.”A White House statement says the act includes “a requirement that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.”  Under the act, students will not be as easily targeted by credit card solicitations.  “A lot of our students are able to just sign their names and get credit cards with relatively high limits without any proof of being able to repay the debt” on that credit card, Copeland-Morgan said.    
About three years ago, Miller recalls, she was  walking down Marshall Street,  a block of restaurants near Syracuse University, when she was lured by an offer from Pita Pit: get a free pita if you sign up for a credit card.  She acknowledges that she signed up for the card in exchange for the free pita but never activated the card when she received it in the mail.  Pita Pit Manager Christos Agnes said a few credit card companies had previously made arrangements with the restaurant but says Pita Pit hasn’t partnered with any creditors for solicitations within the past three years.  Some students are not as easily attracted to credit card solicitations.  “I just take them and throw them out,” said Robert Solonick, a 19-year-old sophomore International Relations and Spanish major at Syracuse University.  “I don’t want to get huge amounts of debt while I’m in college.”  As more debt accrues on a credit card, it becomes more difficult to establish good credit.  Although Solonick says he is mindful of having good credit, he doesn’t think most people his age are thinking of that.   “Young people think about here and now,” he said.  The act will undoubtedly affect credit card companies, with the new restrictions on how they can target college students.  Copeland-Morgan says the act is not intended to limit creditors from reaching out to college-age students.  “Basically it comes as a result of various aggressive marketing to young people who end up ruining their credit before they’re at an age where they really understand how important and how valuable good credit is.”

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