Student Credit Cards and Regulations
Credit card companies face more stringent regulations when targeting high-school- and college-age consumers . The law imposes restrictions on how these consumers can acquire and use credit cards.
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CARD Act
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The Credit Card Accountability, Responsibility and Disclosure Act of 2009 (commonly referred to as the CARD Act) added strict limits on how credit card companies may market and issue credit cards to students. These laws take effect no later than August 2010.
Users Under 21
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The CARD Act makes it harder for those under 21 to get and use credit. Unless they can prove they have the means to repay their debts, those under 21 must have a co-signor.
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Offers
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Credit card companies may not send card offers to students or anyone under the age of 21. All offers to students must be made in writing and written in clear, plain language.
Enticements
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Credit card companies may not offer free extras like pizza or T-shirts in their marketing to students near colleges and universities.
Student Education
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Students must receive credit and debt management education as part of any new student orientation program.
School Contracts
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Colleges must reveal any marketing agreement they have with credit card issuers. Issuers must also file annual statements with the Federal Reserve Board detailing the terms of any agreements they have with colleges and universities through which they offer promotional accounts to students.
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References
- Photo Credit Image by Flickr.com, courtesy of Andres Rueda
