On monday February 22, 2010, the credit CARD act went into effect, changing the rules and regulations of obtaining a credit card.
The new act prohibits lenders from issuing credit cards to anyone under 21 years of age without an adult co-signer who is capable of paying off the line of credit. In addition to a co-signer, credit bureaus can no longer supply reports on Americans under 21 without parental consent.
The act has recieved praise from consumer advocates for it’s curbs on service fees and interest rate hikes. While this control may be viewed as beneficial it has also caused some banks to reduce credit limits and even close accounts.
Although some state laws have already prevented credit card companies from marketing their products on campus, the new act takes it one step further. Under the new act, credit card companies are no longer able to exchange tangible goods for applications collected on campus or at college sponsored events.
Institutions that allow for on-campus solicitation will also see changes under the new act. The act backs tougher state laws and institution rules that mandate financial-literacy training.
Particular changes in the rules and regulations may be due to credit card company critics complaining that a generation of young Americans were trapped into long term debt because of casual campus marketing.