New “CARD” Law Targets College Students

Credit Card Accountability Responsibility and Disclosure Act (“CARD”) of 2009 targets College Campuses.

The new law, among other things, will limit how credit card companies market their products to anyone under the age of 21.  Meaning, less free t-shirts, beach towels and easy credit on college move-in days.   The purpose of the new CARD laws is to lower credit card debt that straps many college students upon graduation. The new law is currently scheduled to go into effect February 22, 2010.

New Requirements for Students Younger than 21.

A credit card will not be issued to anyone under the age of 21 unless a written credit card application includes either:

(a) A co-signor signature from a person over the age of 21 with means to repay the credit card, or

(b) Financial paperwork confirming the new cardholder is independently capable of repaying their debts.  The guidelines regarding whether one is “independently capable of repaying debts” has yet to be determined.

Protection from Prescreened Credit Offers.

Lenders will no longer be permitted to contact individuals under the age of 21, unless the individual elects, in writing, to have their names and addresses submitted to credit card companies.

Co-Signor Approval for Increased Credit Line.

Beginning on February 22, 2010, an increase in credit line for an individual under the age of 21 will have to be approved by a co-signor.

No More Free T-Shirts.

The days of walking around campus and receiving a free t-shirt, book-bag, pizza coupon, beach towel and other marketing freebies in exchange for filling out a credit application will be over.

College students are supposedly among the most well-educated demographic in the country.  Generally, this law is taking away the convenience of obtaining credit for unforeseen purchases while in college.  Furthermore, while attending college, expenses are generally less, whereas, students have a pre-paid meal card and dorm, and any disposable income is generally for recreational spending.  Therefore, in college, while expenses are low it is an opportune time to have access to credit and in addition to finance classes learn first-hand how credit works.

Rather, the new law forces college students to learn financial lessons while their expenses dramatically increase after graduation with obligations such as rent, food, insurances, car payments, student loans, etc.  Lastly, the onerous of the new law is being placed on parents and guardians of college students.  With college tuitions skyrocketing and family expenses increasing annually, it is extremely uncertain whether parents of college students can bear the additional financial burden which CARD places on them.   Overall, the marketing segment of this law which eliminates the credit card circus tents is a step in the right direction; however, the extra financial burdens may not be the best solution(s).

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Philadelphia, Pennsylvania region, you may contact Sadek Law Offices, LLC at 215-545-0008 or email brad@sadek-cooper-site. Thank you.

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