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| How will the CARD Act affect young consumers? |
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Last Updated
18th of May, 2010
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According to provisions in the CARD Act of 2009, no credit card may be issued to a consumer under the age of 21, unless he or she has submitted a written application to the card issuer that meets the following requirements:
- The signature of a cosigner, including the parent, legal guardian, spouse, or any other individual who has attained the age of 21 who has the means to repay debts incurred by the consumer in connection with the account, or
- Financial information indicating that the person under the age of 21 has the ability to independently repay the debt.
If a parent or other adult has cosigned a credit card to someone under the age of 21, the card issuer may not increase the credit limit on the account without the cosigner's written approval.
Pre-screened credit offers may not be sent to those under the age of 21 unless they have opted in with the credit reporting agencies to receive such offers.
Colleges and universities must publicly disclose contracts or agreements made with a card issuer or creditor for the purpose of marketing a credit card.
Card issuers and creditors may not offer a student at an institution of higher education any tangible item to get them to apply for a credit card if the offer is made on or near campus, or at an even sponsored by or related to the college or university.
Colleges and universities will also be encouraged to limit on-campus marketing of credit cards, and offer credit card and debt education, and counseling sessions, as a regular part of new student orientations.
Additionally, creditors will be required to submit a report to the Board describing the terms and conditions of all business, marketing, and promotional agreements and college affinity card agreements with colleges and universities, alumni organizations or foundations affiliated with or related to such institutions, with respect to any college student credit card issued to a college student at such institution.
The Comptroller General of the United States shall, from time to time, review these reports and periodically submit a report to Congress on the impact of these arrangements have on credit card debt. The Comptroller General will make legislative or administrative recommendations it determines to be appropriate.
For more details on the CARD Act, see: The CARD Act: What it Does ... and Doesn't Do
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