Under the 2009 CARD Act, credit cards will be limited only to people over the age of 21, or 18 year olds with sufficient income for a credit card. This rule change was intended to keep credit cards out of the hands of people who may or may not understand the risks involved with credit card debt.
According to a study from the same year, Sallie Mae found that the average college freshman had $2,038 in credit card debt. By the time students reach their senior year, credit card debt soared to $4,138. College students are notorious for financing expenses through their college years, working only part-time at the most to complete their rigorous full-time studies.
Credit card debt can be challenging for both students and parents of students alike. More and more parents are choosing to consign for their student’s credit cards, which makes the parents liable for charges in the event that the student cannot repay his or her debt in full. Luckily, student loan debt is much less expensive than credit card debt, and students still finance the bulk of their expenditures with inexpensive student loans with interest rates much lower than the average credit card interest rate. The average college student with student loans now graduates with more than $20,000 in student loan debt.
The CARD Act is drawing heat for making it too difficult for younger people who do not attend college to sign up for a credit card. The Act is also prohibitive for families with stay-at-home parents – parents who would not have sufficient income to get a credit card in their own name. Industry insiders suspect that the rules will be changed to allow for stay-at-home parents to have better access to credit.