Sunday, February 21, 2010
Under 21? Getting a credit card just got tougher
New laws will take effect Monday that will make it harder for college students to get a credit card. The average student credit card balance is now over $3000. Students may need to provide proof of solid income or other assets in order to apply for a new credit card. Items used to tempt students at tables on college campuses to apply for credit cards will be prohibited under the new law.
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ReplyDeleteI found a similar article on bankrate.com, and it went on to tell how the new law will force credit card companies to drastically cut back on their marketing efforts to college students.
ReplyDeleteIf you are under twenty-one, pre-screened credit card offers are not allowed to be mailed to you unless you have opted in with the credit reporting agencies to receive such offers.
Credit card companies will not be able to use free gifts such as t-shirts, free pizza, or any other tangible gifts to persuade the students to apply for credit cards on or near campus or at university-sponsored events.
An interesting quick fact: average number of cards per student is 4.6.
http://www.bankrate.com/finance/credit-cards/under-21-credit-cards-hard-to-get-1.aspx
I think this article is very relevant to college students becasue I feel like credit card companies are way to loose with giving away credit cards to younger people and people who don't deserve to have credit. As soon as I turned 18 I started to get offers in the mail from mastercard and discover wanting to give me credit cards even though I had no need or credentials to own a card. I think this is a good direction for credit card companies to move because the more they screen and find suitable people to hold their credit cards the quicker the national credit card debt will start to decrease.
ReplyDeleteI think from an economy's point of view, this is a good move. The is because if the banks start lending out too much without any certainty that the loans will be paid back, they will eventually find themselves in trouble just like in the current economic crisis.
ReplyDeleteLike Nathan mentioned, this article is relevant to our current situation. I agree with Iqbal in saying that this new law is a "good move" from an economic standpoint. We got ourselves into this situation by having banks lend out money and people not being able to pay back on loans. College students are not the most careful spenders when it comes to using credit cards. This step in age for credit card eligibility might hurt credit card companies but banks will no longer have to lend money to students that may not be able to balance their budgets on time.
ReplyDeleteThis will help both sides, the credit card companies and the college students. Some students spend without thinking twice and realize when payment time comes along they do not have the funds to pay it back and have more fee's racked up into their account, so in many instances this will help the college students with their future credit numbers and also not having to pay huge debt on their credit cards. Also I would say that some kids would default on payments which hurts credit card companies so this will help limit the amount of college students having credit cards on their own.
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