Saturday, October 31, 2009

New Law Banning Credit Card Offers On College Campuses

Posted By: Janielle Viggiano

There is an upcoming change in the laws that govern credit promises to rid campuses nationwide of credit card pressures and sales tactics. According to Vellequette, “Passed in May, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 will, beginning in February, prohibit credit card issuers from signing up anyone under 21 who either doesn't have a co-signer or the ability to make payments on their own (2009).” The law also prohibits companies from passing out free incentives such as: t-shirts, hats, pizza on campus or at events such as football games or any sporting event. The law requires people under the age of 21 to get a parent or guardian signature of approval before they can be issued a credit card and colleges and universities must disclose any deals they make with credit card companies.

In a 2008 study done by Sallie Mae Inc., a leading student loan company found that, “of 280 undergraduate college students’ ages 18 to 24 found that 84 percent of the respondents had a credit card, compared to 76 percent in 2004. Half of the respondents had four or more cards. The mean balance of the students’ cards was $3,173, and the median debt grew from $946 in 2004 to $1,645 in 2008. The number of freshman arriving on campus with a credit card went from 23 percent in 2004 to 39 percent in 2008, according to the study. Forty percent of the respondents said they charged items to their credit card knowing they didn’t have the money to pay for them (2009).” In the same study they found that 18 to 24-year-olds carry more debt than ever before as a group, and are most likely to be the focus of aggressive, manipulative, and even predatory practices and are the most likely to not make payments.


No comments:

Post a Comment