Bill Becomes Law: Congress’s New Student Credit Card Protections
Posted 24 Jul, 2009
Back in May I wrote about a new bit of student credit card legislation working it’s way through congress. At the time the bill had passed only in the Senate, but just recently the Credit Card Accountability Responsibility and Disclosure Act of 2009 finally got signed into law.
Title III - Protection of Young Consumers
The new act offers several tiers of new consumer protections against credit card companies, including an entire title dedicated to protecting young consumers. To save you the trouble of reviewing the entire bill, I’ve included a summary of what the Act will do to help protect students:
- Age limit. Credit card companies cannot offer a credit card to consumers under the age of 21 unless he or she has submitted a written application.
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- Co-Signers. To help ensure that students (and their guardians) are well informed before they open a credit card, credit card applications by students under age 21 must be co-signed by an adult age 21 or over. This person can be a spouse, parent, guardian, or anyone else of appropriate age, and must agree to pay the bill if the primary applicant does not.
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- Joint Approval of Credit Increases. Credit card companies must obtain approval from both the primary card holder and the jointly liable co-signer before increasing credit limits. This helps protect students from over spending, and co-signers from being liable for such overspending.
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- College Accountability. Colleges must disclose any agreements they have made with credit card companies that involve marketing cards to students.
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- No More Freebies on Campus. No more “free” t-shirts! Credit card companies can no longer offer free items to entice students to sign up for a credit card if they are on a school campus or at an event affiliated with a school.
Protecting Students from Credit Card Debt
The Credit Card Accountability act is a great step towards protecting students from the potentially life-altering affects of credit card debt, and I am pleased to see Congress took action to help eliminate some of the forces that have been responsible for many students graduating with unacceptable levels of credit card debt.
That said, we as parents still have the primary responsibility to teach our children about being financially responsible. I think we all know that simply turning 21 doesn’t guarantee financial prudence, so these new laws can be used as a teaching opportunity. If your child asks you to co-sign on a credit card, use the request to teach your student about credit, interest rates, repayment, debt, and financial responsibility in general.
For more tips about helping your child become a responsible adult, take a look at my previous articles on the subject.
All the best,
Deborah Fox
Deborah Fox is the founder of Fox College Funding®, a nationwide company that helps families find creative ways to reduce their college costs.
photo: woodsy
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Related Posts
Back in May I wrote about a new bit of student credit card legislation working it’s way through congress. At the time the bill had passed only in the Senate, but just recently the Credit Card Accountability Responsibility and Disclosure Act of 2009 finally got signed into law.
Title III - Protection of Young Consumers
The new act offers several tiers of new consumer protections against credit card companies, including an entire title dedicated to protecting young consumers. To save you the trouble of reviewing the entire bill, I’ve included a summary of what the Act will do to help protect students:
- Age limit. Credit card companies cannot offer a credit card to consumers under the age of 21 unless he or she has submitted a written application.
. - Co-Signers. To help ensure that students (and their guardians) are well informed before they open a credit card, credit card applications by students under age 21 must be co-signed by an adult age 21 or over. This person can be a spouse, parent, guardian, or anyone else of appropriate age, and must agree to pay the bill if the primary applicant does not.
. - Joint Approval of Credit Increases. Credit card companies must obtain approval from both the primary card holder and the jointly liable co-signer before increasing credit limits. This helps protect students from over spending, and co-signers from being liable for such overspending.
. - College Accountability. Colleges must disclose any agreements they have made with credit card companies that involve marketing cards to students.
. - No More Freebies on Campus. No more “free” t-shirts! Credit card companies can no longer offer free items to entice students to sign up for a credit card if they are on a school campus or at an event affiliated with a school.
Protecting Students from Credit Card Debt
The Credit Card Accountability act is a great step towards protecting students from the potentially life-altering affects of credit card debt, and I am pleased to see Congress took action to help eliminate some of the forces that have been responsible for many students graduating with unacceptable levels of credit card debt.
That said, we as parents still have the primary responsibility to teach our children about being financially responsible. I think we all know that simply turning 21 doesn’t guarantee financial prudence, so these new laws can be used as a teaching opportunity. If your child asks you to co-sign on a credit card, use the request to teach your student about credit, interest rates, repayment, debt, and financial responsibility in general.
For more tips about helping your child become a responsible adult, take a look at my previous articles on the subject.
All the best,
Deborah Fox
Deborah Fox is the founder of Fox College Funding®, a nationwide company that helps families find creative ways to reduce their college costs.
photo: woodsy
Subscribe in a reader
Subscribe by Email
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