How Will The New Credit Card Rules Affect Students?
In the last decade, many credit card issuers have found college campuses to be very lucrative to their business. Many campuses had their students flooded with credit card offers from credit card companies across the nation and large numbers of students applied for credit cards to assist them in paying for everyday purchases and entertainment around town. When the new credit card rules issued by the federal government went into effect, the methods that credit card companies were allowed to use to market on college campuses and to students changed dramatically.
No Direct Marketing On College Campuses
In the past, students that were signing up for classes or attending orientation could walk past a credit card marketer set up in the hallway of the school dispensing brochures and applications to any student that was interested. Some companies even used free sandwich coupons and free t-shirts to lure more students to their tables to complete their credit card applications. A student interested in a credit card could sign up on the spot and expect to receive the credit card in the mail within the next two weeks.
The ability of credit card companies to market on college campuses has been severely limited in the new rules taking effect. Credit card marketers can no longer set up shop in the campuses areas frequented by students, such as outside the cafeteria or in front of the student union building, to entice the students on campus to sign up for their credit card products. The new rules do not restrict the mailing of credit card offers to students living in campus dorms.
Restrictions For Those Under 21
There are also new restrictions in place for the issuing of credit cards to individuals under the age of 21. In the past, any person over the age of 18 could apply for a credit card simply by filling out the application and returning it to the credit card company. Now, all applicants for credit cards that are under the age of 21 will have to meet more stringent requirements in order to obtain the credit card.
The first new requirement is that applicants under the age of 21 must have an independent source of income that is verifiable that can be used to pay for the charges made on the credit card. In the past, the only thing that the credit card companies asked for on the applications was the household income of the person that was applying for the credit card, which may or may not have included the personal income of the person applying for the credit card.
If the student applying for the credit card does not have an independent source of income for paying the credit card, then they must have a parent co-sign for the credit card, which makes the parent equally responsible for ensuring that the credit card payments are made. If the parent has co-signed for the credit card, then their written permission will be needed for any credit limit increase that is authorized for the credit card.
- ACS - One of the Best Recommended Companies For Student Loan Consolidation Rates ACS Student Loan Consolidation ACS student loan consolidation program is one good way of dealing with your money and controlling your payments and in general term it is for private student loan. By securing the private you are provided the chances of preserving yourself thousands of dollars. There are different......
- What to Ignore and Watch for in the New Credit Card Rules If you are a baby boomer who is serious about being financially prepared for retirement, there are (in my humble opinion) some very good reasons why you can ignore the new credit card regulatory rules that went into effect on February 22. There are also some important changes to watch......
- Tax Consequences of Student Loans For the last installment of the Student Loan Series, we're going to be talking about the tax consequences of student loans. Previously we covered whether college is worth the cost, the different types of student loans, and repayment options. There are several tax advantages of college students, and we'll look......
- 4 Easy Ways to Raise Your Credit Score For many Americans, dealing with a low credit score can be incredibly frustrating. It’s tough to get any loans and in some cases, it may even affect your prospects for employment. If you’re sick of dealing with a low score, it’s time to starting putting into motion some techniques that......
- The Origin of the Credit Card NerdWallet.com is a website dedicated to educating consumers about the latest credit card deals. A credit card can get you anything from a new suit to a burrito from an outdoor truck. Though some controversy exists about this claim, Bank of America probably issued the first credit card accepted in......
