Credit Card Act Goes into Effect Monday

Feb 19, 2010

by Scholarships.com Staff

New regulations that the federal government hopes will protect college students from excessive credit card debt by making it more difficult for young people to open multiple lines of credit go into effect Monday. The regulations, which fall under the Credit Card Accountability Responsibility and Disclosure Act of 2009, were approved by Congress last May.

The key pieces of the act include the followin:

  • Creditors will be prohibited from issuing credit cards to anyone under 21 without the consent of that applicant’s parent or guardian, or proof that the consumer would be able to make the required payments on their own.
  • Creditors will be barred from offering students perks, such as coupons or T-shirts and book bags decorated with the companies' logos, for opening a new credit card account at campus events.
  • Companies will be required to disclose any existing relationships with colleges and universities annually to the Federal Reserve Board; colleges and universities will be required to disclose any existing relationships with credit card companies as well.

The regulations also included a strong suggestion to institutions of higher education that they provide education and counseling to students who may be struggling with credit card debt, or who may know little about managing credit card usage wisely.

Critics of the act since it was approved say that college students, who take on a slew of new responsibilities once they get on campus, should be treated as adults. For better or worse, students now are more apt to use credit cards to pay for their college expenses, and critics say they shouldn’t meet obstacles when using their credit cards for those costs. (According to a recent survey by student lender Sallie Mae, 84 percent of undergraduates have at least one credit card; 92 percent of those undergraduates use the cards toward college expenses. College students’ average balances are more than $3,100.) Some consumer advocates also say that while it's a good first step toward keeping students from incurring massive amounts of debt, it doesn't do enough, according to an article today in Inside Higher Ed. It fails to include any cap on the interest rate credit card providers can charge, for example.

We have a number of resources available to you about how to avoid credit card debt, make smart decisions about covering your college costs, and managing your money so that you're spending within your means. It may not mean much to you now, but it isn't all that easy to improve upon a credit score. The spending choices you make today will follow you down the line, so ideally, stick to one card if you need one, and if you find yourself in debt, pay off as much as you’re able to each month until you’re done.

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



If you can read this, don't touch the following fields


 
Comments (0)

Most Shared Articles

The mantle of "College President" is one that includes a lot of responsibility and scrutiny, but for some in the higher ranks, the lucrative pay makes it worth it. According to data released by The Chronicle of Higher Education, some private-college presidents have made over $5.4 million in a single year. The average annual salary for full-time college/university presidents in 2014 was roughly [...]

0 months ago 1 comments Read More

Perhaps your 2017 New Year's Resolution is to earn more free college money - that's our goal for you! 2016 is now coming to an end, and so are these scholarship deadlines, so hurry and apply to these end-of-the-year awards while you still can! Girls Who Illustrate Awesomeness Scholarship [...]

0 months ago 6 comments Read More

The incoming Trump administration could reverse President Obama's actions on college sexual assault, giving hope to those who claim their lives were destroyed by false rape claims. However, this raises concerns for some that perhaps those who have been victims of sexual assault and made legitimate reports may not get the protection they deserve. Since 2011, colleges and universities have been [...]

1 months ago 5 comments Read More

Students are being called to "expose and document" professors "who discriminate against conservative students, promote anti-American values, and advance leftist propaganda" on a new website called Professor Watchlist. Turning Point USA, a 501(c)3 non-profit organization founded in 2012 promotes ideas of free-market capitalism and "educates students about the importance of fiscal [...]

1 months ago 7 comments Read More

Finding trustworthy and accurate scholarship and other financial aid information can be tricky these days, especially when it comes to sources that offer unreliable, often misleading content. "Scholarships" offered by scammers who charge fees and operate outside the laws, rules and ethics of modern-day netiquette abound. Here at Scholarships.com, we carefully and thoroughly vet [...]

1 months ago 0 comments Read More

American Flags designated for a Veterans Day ceremony at Brown University were torn and trashed by university students. While a group tried to protect remaining flags, others continued what they believe was a "justified" protest against the recent presidential election. The American flags arranged on Brown University's Main Green flew in honor of the annual Veteran's Day ceremony, which made [...]

1 months ago 16 comments Read More

Black Friday deals will be unleashed in just two weeks with some of the largest retailers getting an early start on Thanksgiving Day. When it comes to end-of-the-year scholarship hunting, no worries - we've got you covered. Score big this holiday season (and semester) with free college money: RMA Foundation [...]

1 months ago 0 comments Read More

The Associate Dean featured as the "chief villain" in a discredited Rolling Stone article on an alleged gang rape at the University of Virginia has been awarded $3 million by a federal court jury. This decision followed an earlier ruling that the discredited article ruined her reputation and "undermined her work to help students who had been sexually assaulted." In November 2014, Rolling Stone [...]

1 months ago 6 comments Read More

November is National Scholarship Month and in its honor, we're doing what we do best - offering the best scholarships out there to help students like you fund the cost of college. Whether you're in high school trying to land some free money before heading off to school or a college student looking to pay next semester's tuition, here are some of the few generous scholarships available to [...]

1 months ago 0 comments Read More