Legislation slated to take effect Feb. 22 will make it harder for some under 21 to get credit cards.
While scrolling through her online bank statement, freshman metal and jewelry making major Amanda Viens said she makes every purchase with plastic. She usually makes her payments on time, she said, and appreciates the portability that her credit card offers, which cash and change cannot.
“I have a little wallet I can throw anywhere. I don’t like carrying change around. I just always use my credit card,” she said.
But millions of young adults may no longer have a “credit” option when they check out. In an effort to help protect young adults from the vulnerability of their age and inexperience, legislation slated to enact the Credit Card Accountability, Responsibility and Disclosure Act, or CARD, on Feb. 22. The CARD Act will make it more difficult, as well as safer, for students under 21 to apply for credit cards.
Some of the new regulations include eliminating interest rate increases allowed if one’s payment is a few days late, along with stopping companies from constantly changing the fine print. Also, anyone under 21 would need a cosigner and credit card companies must stay 1,000 feet away from campuses when giving away free items for those who apply for credit.
Political science professor Dr. Sandra Suarez considers herself an expert on credit cards. She said the new regulations are appropriate because many young people don’t know how to spend money but insists the credit card companies will find ways to get around it.
“This doesn’t take away from someone’s ability to build a credit history, because all you need is a cosigner, and you can get a credit card. Hopefully, this will make young people more educated about the risks,” she said.
Viens said she applied for her credit card without any help to build her credit history.
“I know what purchases I can make and what I can’t. I’m not just going to go crazy and spend everything I have and more. You got to limit yourself,” she said.
But associate professor of psychology Donald Hantula said incoming college students know little to nothing about fiscal responsibility and as a result, will often abuse their new financial freedom.
“There is a real need for financial literacy in the college population,” he said. “Credit allows you to get things immediately. We over-value the immediate and under-value the future, a lot.”
Limits seem to be a thing of the past. Technology has fostered instant and infinite gratification, which is, in part, due to the portability and convenience of quick store purchases and shopping online.
Credit card companies know most consumers prefer plastic money. This trend has not only ubiquitously assimilated into American culture but has a universal influence on buying behavior. For instance, most consumers will spend more money if their credit card company raises their spending limits.
That’s why freshman art major Kate Cassidy said she doesn’t plan on applying for a credit card until she needs one.
“It’ll ruin your life,” she said. “We’re too young to worry about finances. If you’re a student, how the hell are you supposed to also manage a credit card?”
But there are consequences for the safety regulations. Millions of young Americans won’t be able to apply for a credit card, which will inconvenience fast purchases at stores, and virtually halt any purchases over the Web from young people.
Junior therapeutic recreations major Lauren Poletti said she’s proudly been building her credit history since she was 18 but doesn’t know if her parents or anyone else would risk the responsibility of cosigning a credit card with her.
“That’s a lot to ask for,” she said. “I can see why they want to help students, because we don’t really know a lot about finances. I just don’t see why a cosigner would help more than it could hurt because not everyone can get a cosigner.”
Matthew Petrillo can be reached at firstname.lastname@example.org.