Now since the Credit Card Act has been passed into a law, everyone is reevaluating their situations given the terms of the new legislation. Banks and customers both have been required to modify their age old practices involving credit cards as they are becoming more aware of the new law with each passing day. Young adults are not exceptions.
The new law would make it difficult for the young adult, below the age of 21 years, to get credit cards. According to the Credit Card Act, which has been signed into a law on 22 February 2010,
- Young adults below the age of 21 years would now have to have a cosigner sign for them on the credit card form to get approved; otherwise, they wouldn’t receive a credit card.
- The young adult below the age of 21 years would have to prove his income to qualify for a credit card.
- The credit limit on a joint credit card now can only be increased with permission from the adult card holder.
- The banks henceforth are not allowed to offer free goodies to college students to sign for their credit card offers.
- Banks, from now on, would have to disclose the terms and conditions of their credit cards to the college authority to be able to offer credit cards to students.
- Pre-approved credit card offers can’t be sent to students and young adults, and the provider may attract a penalty of $2, 000 for such violation.
- Emphasis has been given on promoting financial literacy amongst the college students.
College campuses have remained the favourite hunting ground for the credit card companies. It's easier to allure young college goers to sign in for credit cards. As a result, our young generation is graduating from colleges with several hundred dollars of debts on them already. This law may help in reducing the debt burden on the young people. But at the same it might increase the burden on the parents to support their children for a longer period. Also, it would put the cosigner at higher risks of getting their credit scores tarnished because of the young card holder.