Under 21? You’ll need a co-signer for a credit card come February

The definition of adulthood in the United States may see some changes as new legislation will change the way American consumers under the age of 21 receive a credit card.

caption (Brian Matthews/TommieMedia)
Getting a credit card will become much more difficult for those under the age of 21 come Feb. 23. (Brian Matthews/TommieMedia)

Effective Feb. 23, the Credit Card Accountability Responsibility and Disclosure Act will employ new credit card regulations that will require people under the age of 21 to have a co-signer or provide proof they have the resources to repay their potential debt before they can even have a credit card.

Under these new restrictions, the co-signer, who can be a parent, guardian, spouse, or any other adult over 21, is responsible in the end for any debt the owner of the card cannot pay.

Junior Cristen Bonz, who uses her credit card as a means to pay for books and other school needs, said she feels that this legislation has good intentions but that it should be up to individual students whether they can have a credit card or not.

“I think it’s fair to let 18-year-olds dig their own graves,” Bonz said. “[It] teaches them to be responsible now.”

Bonz said she uses her credit card mainly to build her credit and she receives 3 percent cash back for her purchases. She pays her bills every month to be sure she does not fall behind.

According to a Sallie Mae report, college students have used credit cards more in 2009 than ever before, including charging tuition and other education expenses.

The study, “How Undergraduate Students Use Credit Cards,” reported that 92 percent of undergraduate credit card holders charged textbooks, school supplies and other expenses to their credit cards and nearly 30 percent had put tuition on their credit cards. In total, students who use credit cards charge an estimated $2,200 for educational expenses.

Shutting down on-campus credit card marketing

In addition to putting restrictions on how minors obtain credit cards, the Credit Card Accountability Responsibility and Disclosure Act will prevent credit card companies from marketing to college campuses.

The law would require college campuses to publicly disclose any agreements credit card companies make with the institution to market toward students.

According to St. Thomas’ solicitation rules, the university requires written permission for any sale or solicitation of products on campus.

The department of Campus Life grants permission to off-campus nonprofit organizations such as credit card companies for no more than two days. Any sales on campus will be limited to assigned tables in Campus Square or the residence halls.

Banks and credit companies are seen often on campus over the course of move-in weekend, targeting students to apply for a card and receive student specials like the three percent cash back that Bonz receives when she uses her card.

Under the new legislation, college students are protected as credit card companies will not be allowed to advertise on college campuses.

“I think this is a smart move as incoming freshmen can easily fall for credit card perks,” said senior Rory Tucker. “I applied for a credit card my freshman year and ended up being late on my first bill. This could prevent that.”

Brian Matthews can be reached at bsmatthews@stthomas.edu

8 Replies to “Under 21? You’ll need a co-signer for a credit card come February”

  1. “The first step to becoming an American- get a credit card. To build up copious amounts of debt is the best way to develop your credit.” – Dennis Reynolds

  2. This is ridiculous. I am 18 and in the eyes of the law an adult. I can die for my country, be put in jail for the rest of my life for murder, work in a strip club, but I can’t get myself a credit card? I have my first credit card right now and the limit is $500. Government just needs to stop making policy just to make policy. Let kids make mistakes if they are going to, that’s how they have to learn. How will they be any more responsible at age 21 than 18 if they haven’t had three years of learning how to manage credit. Where has the “real world” gone? I was always told that it’s hard out there in the real world. Not to my eyes. My generation gets this huge bad rep for expecting everyone to do everything for them or that they don’t accept any blame. Hmm…I wonder why that is when everywhere you turn theres policies like this that just keep spoon-feeding or “protecting” us.

  3. Alyssa: Is this honestly that ridiculous? The fact that you don’t see the hard reality of the “real world” I think speaks volumes in and of itself. I am only 2 years old than you, but I would be glad to share some of the harsh truths you are ignorant to. As a woman, while you are fit to “die for [your] country,” know that it will not be as a Navy SEAL for you cannot be one. Know that it will not be while serving as an Infantry, for women in America cannot hold such a position. You will not serve on a submarine, Special Forces, Artillery, Armor, or Air Defense Artillery. As you are still under 25 car rentals are prohibitively expensive.

    I am further perplexed on how you can act as an adult with the plea of “[l]et kids make mistakes.” Do you want to be a child or an adult? We are part of the same generation, yet our views are nearly incomprehensibly different. As this does not directly affect me (I’ll be 21 by February 23rd) I can say I’m happy it bars my brother from making a foolish mistake that will end up costing our family anyways if he can’t afford it. For one, being 21 allows for a greater likelihood that you are employed and more capable for paying back the debt. It also gives you more time to deliberate on whether or not getting a credit card is a good idea.

  4. As for the article, it is well written. However, it is not entirely correct.

    Title 3, Section 304:
    Prohibits a card issuer or creditor from offering to a student at an institution of higher education any tangible item as inducement to participate in an open end consumer credit plan if such offer is made: (1) on or near the campus of the institution; or (2) at an event sponsored by or related to such institution.

    As long as no tangible item is offered credit companies can (and undoubtedly will) still offer credit cards.

    While I understand the limitations of an article, it would have been nice to have a link to the Credit CARD act. As well as an overview on the other things it regulates which would likely create a far more realistic picture in the readers minds of what is going on with the act. An aside, it was passed with high bi-partisan support as well.

    Also, Andrew, you are misquoting the fictional character from “It’s Always Sunny in Philadelphia”.

  5. Alyssa,
    This law is not going to make that much of a difference in the way you can get credit cards anyway, especially for St. Thomas students, since the average one has over $30,000 in debt by graduation. Credit card companies do not just hand out the cards like candy on Halloween, you have to have the proper qualifications for one. Things like your credit score, your income, and your assets all play major parts in the qualifications for a credit card, and your typical 18-20 year old possesses high marks in none of those, which is why credit card companies already require a co-signer on almost all cards for 18-20 year olds already.

  6. Brett – don’t be so ridiculing of Alyssa. While I agree with Mark on the changes, I think Alyssa makes some good points.

  7. Mark,
    You truly believe that it is difficult to get a credit card? A couple of months ago, we went to Home Depot and they had a deal where if you sign up for their card, you get 10% off. My dad said, “sure, I’ll do it and never use it again.” The check-out person basically said, “hey, you will still get the 10% off.” They looked at his license, he had to fill out a couple forms, and he got the credit card on the spot with a $5,000 limit. Considering anybody could just spend $5,000 without a legitimate check, they are handing them out just like candy.

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