Unless you’ve been hiding under a rock, President Obama signed the Credit Card Act of 2009 a few months ago. What some college students don’t realize is that there are some notes in there that are going to affect college students, and I wanted to break it down for you.
Limits on those under 21 years of age
If you’re under the age of 21, you’re going to find that you’re going to have a harder time getting a credit card. With the new act, you’re going to have to prove to the credit card companies that you either have a job, or you’re going to need a co-signer. If you can’t get either one of these two, you’re going to be out of luck.
You’re protected from pre-screened offers
Do you remember when you were 18, and the mailbox was always filled with the credit card junk mail? Well, with the new act, you can be rest assured, that the credit card companies won’t be able to do this to you. For everyone that is under the age of 21, pre-screened offers will be banned, unless you opt-in to the offers.
No more free merchandise
When you think back to walking the college campus, you probably remember a lot of credit card companies offering free things in order to sign you up for a card. From free food, to t-shirts, companies are now banned from offering free goods on campus, and any location nearby a school.
Your credit limit is limited
With the new act in place, you’re no longer going to get those $5,000 credit limits, but instead, the act now only allows you to get a card no greater than $500, or 20% of the student’s annual income, whichever one is greater. This will hopefully cut back on crazy limits that many students have been receiving.
Student credit cards can be a danger, especially if you don’t know how to manage finances. I’ve always been against signing up for a card that offers freebies, because you don’t know what you’re getting yourself into. Instead, do your research online, or ask a friend. Yes, this act will help a lot of students with debt, but it won’t solve the problems 100%
This was a guest post by Tom Tennis from findcollegecards.com, which focuses mainly on student credit cards, where students can do all the comparing themselves from many major credit card companies.
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