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Personal finance predictions for 2010: Your kids

New law will make it much tougher for students to get credit in 2010

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10. Your spending
9. Your credit card
8. Your debit card
7. Your rewards
6. Your phone
5. Your paycheck
4. Your home
3. Your mail
2. Your ID
YOUR KIDS

How will young adults obtain credit in the new financial landscape?

The Credit CARD Act and its crackdown on campus card promotions will likely have a chilling effect.

"Young adults have never really been the focus of direct marketing activity, and now with more restrictions in place, there could be fewer offerings for this particular demographic," says Andrew Davidson of Mintel Comperemedia.

Even the measly 1 percent of credit card offers targeted at those under 25 have dwindled recently. Chase and Discover haven't pitched to students since 2008; Bank of America ceased its student mailings in the spring of 2009.

Davidson says efforts by the FDIC to convince major banks to offer low-dollar loans to young adults have yielded little results so far.

Renewed consumer interest in co-signed cards are seen as a way to steer students away from less desirable alternatives such as payday lenders. Davidson says prepaid cards that offer a line of credit may be another avenue for some cash-strapped young people.

Still, there are bright spots: MetaBank, the largest player in the student prepaid market, added a rewards program this year and American Express recently unveiled Zync, its new youth-oriented card with customizable rewards and a modest $25 annual fee.

"Signs are that the major card issuers are not ready to give up on the young adult market yet," says Davidson.

2010 financial countdown home: 2010 Financial Predictions

See related: A comprehensive guide to the Credit CARD Act, Fed tells issuers to stay far from campus, Co-signed cards: Are they poised for a comeback?, American Express unveils Zync

Published: December 31, 2009


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