Today, in the third installment of this series, we talk about the protections for students – or those consumers under the age of 21.
This one carries mixed implications. On one hand, it does a great job at protecting students from predatory credit card practices. On the other, many feel that it does little to address the lack of financial education needed to teach college students real life financial management skills. The argument is that without the additional financial education requirements, are 21-year-olds really any more prepared to make smarter financial decisions than they were at 18?
We'll let you be the judge. Here's what you need to know:
- Credit card issuers must verify proof of income or
otherwise require a co-signer before issuing a credit card to consumers
under the age of 21. - Credit card issuers
cannot send prescreened card offers to those under 21 unless they have
consented to receive such offers. - Card issuers
cannot raise the credit limit on an account for persons under 21 with a
co-signer, without written permission from the co-signer. - Credit
card issuers are prohibited from providing free items in exchange for
applications when marketing to students on or near campus. The days of "credit card swag"
(free t-shirts, frisbees), in exchange for credit card applications are
over. Rewards programs offered with credit cards are still allowed,
however.
What you need to know: While
the new rules were designed to protect young consumers, they neglect
one very important component – financial literacy requirements to teach
college students about credit card and personal finance management.
Without financial literacy requirements, 21-year-olds will be no more
prepared to manage their credit cards than they were at 18.
Do you feel the student protections go far enough? Or do they do exactly what they should? Share your thoughts in the comments section below.
Join us tomorrow for the fourth installment of our week long series on the Credit CARD Act, in which we cover the new rules for enhanced consumer disclosures.
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{ 2 comments… add a comment }
The regulations are well founded. Credit for people in general has been too loose for a long time but for young people under 21 there needs to be strong regulations because they tend to not be well trained in moderation. I wasn’t – were you?
I am 19 and know how to manage money. I learned through the mistakes of my parents and my siblings that I need to make smart financial decisions.
I think education would be the best key to managing credit cards, not boosting the age limit. I am 19 and just got my first credit card yesterday. Does that mean I am going to go an spend my $800 limit? No! I am going to use it to make small purchases such as my gas for the month and then pay it off at the end of the month. Just because someone is older does not mean they are any more responsible than me or any of the other youth in our country.
If someone is old enough to fight and die for our country then they should have all the rights that those over 21 have. Plain and Simple.