Personal finance predictions for 2010: Your kids
New law will make it much tougher for students to get credit in 2010
|2010 Financial Predictions|
|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|
How will young adults obtain credit in the new financial landscape?
"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
- Guide to responsible credit card use in college – Responsible credit card use in college can help ensure a more secure financial future ...
- Pay college tuition with a credit card: Smart move or sign of desperation? – Many people use credit cards to pay tuition because it's convenient and it can earn rewards. But it can be a costly move ...
- The college student's guide to earning points, miles and rewards – It's never too early to start earning points, miles and rewards. Despite age and credit limitations, here's how college students can combine cards, loyalty programs and other tools to save money on travel and everyday expenses ...