Bill Limiting Credit Card Access For College Students A Double Edged Blade
Come next month, a lot of new faces are going to be turning up in colleges all over the country. Along with them will presumably be the last hurray of credit card companies wanting to market their credit cards to this particular age group. Next year, the credit card bill will make things much harder for them.
The new credit card bill set to take effect on February of next year is dead set on protecting risky creditors from getting credit and ruining their finances. Among these risky creditors are college students. Young, adventurous and generally financially naive, students have long been one of the most attractive market segments for credit card holders. This was especially true during the time when credit card holders could expect huge profits from poor borrowers who would revolve their debts, paying mostly the penalty fees instead of their debts every month. Now that the economic crisis is in full swing, this is no longer the case and the credit card bill is also going to make it doubly sure that it remains so.
Under the credit card bill, teenagers and college students can only get a credit card under one of three conditions. First, they must have a regular source of income which can cover their credit card spending. Second, they must have finished a course on financial responsibility. Third, they must have a co-signer such as a parent or a guardian. Credit card holders are also no longer going to be allowed to market their wares directly in college campuses which will make them a little bit harder to access.
The upside of this is that teenagers and college students who are not very good at keeping an eye on their finances and using their credit cards responsibly will have a harder time getting one. As a result, they won’t ruin their financial situation and go into debt even before they’ve graduated college. Optimistically, the credit card bill will lower the number of college students already sunk in debt even before they’ve found employment.
The downside is that college students and teenagers who are good at managing their finances miss out on an opportunity that could have given them a better understanding of financial responsibility. Another thing is that, without credit card access, college students will not be able to build up their credit score. Building up a good credit score is a necessity for proving a person’s credit standing. Most loans and mortgages approval lean heavily on the applicant’s credit score.
Realistically, teenagers and college students will still be able to get credit cards. It just won’t be as easy as it was before and only those who are really deserving of it can actually get a credit card.
