College students love, hate new credit card law

Under-21 restrictions will help some, hurt others, students say

By Connie Prater

College students across the country give mixed reviews to a new law that restricts issuing credit cards to people under 21.

Young adults and credit cards: Law brings big changes
Beginning in February 2010, young adults' access to credit cards will be curtailed, as will credit card marketers' access to students, as part of a far-reaching reform law. CreditCards.com looks at how the changes will affect the industry, parents and young adults. MAIN: Credit cards dropping out of college. Details of law's changes for young adults. College students love, hate new law. MAP: How students across the U.S. react. Fed to issuers: Stay 1,000 feet from campus. When NOT to piggyback on parents' credit. Alternative ways for students to build credit. VIDEOS: Students give mixed reviews.

'It's a good law'
"I think it's a good law," says Cierra Jackson, a 21-year-old public relations major at Florida A & M University. "Most people get credit cards and are in debt before they finish their first year in college."

Adds Marcus Jonsson, 20, from the University of Southern California in Los Angeles: "It doesn't make sense to have a credit card without a steady income. I mean, how do you ever plan to pay it off?"

Quashing financial independence
"I think such a law is ridiculous because it is further limiting our rights that we deserve as adults," says Todd VanDuzer, 19, a business major at Arizona State University (ASU) in Tempe. He says he has Capital One and Chase credit cards with no debt. "If we can get tried in court as an adult and go to war, we deserve the same rights as an elder would."

Like VanDuzer, ASU bioengineering freshman Mary Kate Siuba, 18, says she disagrees with the new law's intent. College students are already taking the big step of moving out, she says, adding the law prevents them from becoming independent.

"As an out-of-state student from Indiana, I'm trying to live my life doing as much as I can on my own," Siuba says. "Having my parents co-sign would only be bringing them back into the picture."

To avoid having her parents co-sign, Siuba says she plans to apply to for a credit card before the new law takes effect in February.

Amanda Ionovsky, a 19-year-old University of Notre Dame student questions why the law focuses on under-21 as the cut-off age.

Doesn't want anyone 'playing mom'
Emory University sophomore Alice Chen, 19, who has two credit cards that she pays for on her own, says she feels that having a credit card allows her to live more independently as a young adult. Chen says she adamantly opposes the law, even if it could help some students avoid credit card debt.

"I don't think it's the government's responsibility to make sure we spend our money wisely," Chen says. "I don't need or want anybody playing mom."

Chen adds that she will likely apply for another credit card that has a rewards program before the law goes into effect. She said she would not ask her parents to co-sign on a credit card account.

"I think my parents will feel like they have the authority to tell me what I can or can't spend money on because as co-signers they become responsible for what I am unable to pay off monthly," Chen says. "I'm the one making the money; I'm the one who's going to spend it. That's my business."

Building up good credit
Andrew Jacks, 20, a secondary education junior at ASU who uses his Citi credit card for books, gas, groceries and emergencies, said he has learned to manage his credit card debt, which once reached $800, and urges others to do the same.

Jacks said he believes the law would prevent students, who do not have an income or whose parents will not co-sign, from starting to build up their credit.

Emory sophomore Mike Seidman, 19, says he believes not having a credit card would make his college experience more difficult.

"I use my credit card for almost all of my purchases and without one, my spending possibilities would be severely limited, especially for higher ticket items," he says.

Seidman said although having a debit card is a good alternative for young adults, he does not believe debit cards alone are enough. He said he uses a debit card linked to his checking account to pay off his credit card to help him build his credit score.

Lessons learned from credit cards
Some students -- Jayne Guare is one of them -- tell stories of getting into trouble with credit cards.

Guare is a 20-year-old nutrition science major at Penn State University who got her first credit card at age 18. She signed up for it at an American Eagle Outfitters retail store "so I could get 15 percent off my purchase," she recalls.

"I paid that off immediately and then didn't touch it for anything. Then I charged $500 in books and paid that off too," Guare says. Then things changed.

"When I went to Penn State Harrisburg as a freshman, I charged everything. I was working two jobs and going to school full time, not something I recommend. I ended up being $3,500 in debt, though I never made a late payment, so I guess I still have good credit. And then they extended my limit to $4,500.

"This past summer I had to work three jobs though, because I wanted spending money too. I didn't want them to pay it off, but my dad sent me an e-mail with a chart about interest rates. I would have had to pay 18 percent. I don't regret it; I can't regret anything I've learned from. I do regret that my parents found out. The whole thing sucked a**, a phrase I think students can really relate to. My sister still doesn't know about this."

Guare adds: "It's pretty embarrassing. I've always been extremely responsible, always had a job, always made car payments. Last year, I was just like: Swipe! I mean it's better than a heroin addiction. It could be worse."

Freelance writers Griselda Nevarez, Josh Barone, Lexi Belculfine, Tiffany Han, Nicole Blake, Keaton Gray, Skyy Sandifer and the University of Miami/Miami News Service contributed to this report.

See related: A comprehensive guide to the Credit CARD Act of 2009, Will new credit card law help or hurt consumers, How to cope until the new credit card rules take effect, What the new credit card rules mean for you, Interactive time line: How the bill became law, when its provisions take effect, Law alters cozy relationship between colleges, credit card issuers

Published: September 30, 2009

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