Videos: Students react to new laws limiting their access to credit cards
Most say changes are OK, though some call them arbitrary, unnecessary
Dorm food, boring lectures, cases of beer and ... credit card debt. For many college students, credit cards are one of many first-time experiences. But unfortunately, the encounter sometimes leaves a massive debt hangover that can linger long past graduation.
Enter the Credit CARD Act of 2009. Taking effect in February 2010, the law will require young adults under 21 to have a parent or legal guardian co-sign for them if they want a credit card -- unless they can show proof of income. Credit card companies will be banned from offering gifts, such as T-shirts or pizza, for applying for a card on campus or at university-sponsored event, too.
The legislation could dramatically decrease the amount of students carrying plastic. According to an April 2009 study by Sallie Mae, 84 percent of undergraduates have a credit card, and the average debt they hold is $3,173.
We talked to students at the University of Texas at Austin and students at the University of Missouri to get their reaction to legislation restricting their financial freedom. Scroll down the page to see what they had to say.
"My parents are like, 'Credit cards are bad; you'll get into debt'"
We spoke with students in Austin, Texas, about their credit card roots and habits to get a feel as to how much the new legislation would impact them. Here's what they said:
"We should have the choice if we want to get a credit card"
Students we interviewed at the University of Missouri were split on whether an age restriction on credit cards is a good idea. However, they agreed marketing to students could have some serious consequences. Here's what they said:
"I did have a credit card when I was 18, and I'm still paying it off"
The majority of students we spoke with at the University of Texas at Austin said they believe the law is a good idea. "I don't think when I was 18, I was responsible [enough] to have a credit card," one student said. Some were against the banning of credit card marketing on campus, however, saying they "loved free T-shirts" and that signing up up for a card is a "personal decision." Here's what they said:
|More about credit cards and students|
See related: Credit card reform and you, Sample credit card contract for parents and their young adult children, Law alters cozy relationship between colleges, credit card issuers, Study: Undergraduates relying heavily on credit cards, A comprehensive guide to the Credit CARD Act of 2009, Obama signs new credit card reforms into law, Interactive timeline: How the credit card bill became law, when its provisions take effect, Will the new credit card law hurt more consumers than it helps?, Annual fees return in credit card mail offers, How to cope until the new credit card rules take effect, What the new credit card rules mean for you, New credit card rules don't cover business, corporate credit cards, Federal banking regulators finalize sweeping rule changes for credit cards
- Do's and don'ts when giving teens their first credit card – Decide whether it's time, then help your teens use cards wisely, and put checks in place if they don't ...
- Q&A: Leah Ingram on college costs and credit – Author Leah Ingram and her husband got their credit in shape before taking out loans to send their daughters to college ...
- Sending kids off to college with a rewards credit card – Sending your kids off to college using a rewards credit card can help you earn rewards points while teaching your kid how to be financially responsible ...