Boston Bankruptcy – Under 21? You may only have DAYS left to get a credit card without a co-signor

February 16, 2010

by Attorney Kara O’Donnell
O’Donnell Law Offices

If you are under 21 and of limited income (i.e. most college students) you may only have a matter of days before you can obtain a credit card WITHOUT a co-signor.  See my recent blog post below for details of the CARD Act which goes into effect February 22, 2010.

Essentially, President Obama is on a mission to reduce the availability of credit cards to young consumers.  This is a direct response to the long-standing efforts of credit card companies to sign up jobless and naive college students.  The goal is to solve a problem that hurts so many college graduates – too much debt.

This is a summary of the “Youth and Credit” provisions of the Act:

  1.  Less Access to Credit Cards Before the Age of 21
    The CARD Act’s most significant rule is restricting the availability of credit cards to young adults thus preventing reckless spending.
  2. Credit cards will not be issued to anyone under the age of 21 UNLESS:
    (i) they have an adult (of at least 21 years of age) to co-sign the credit card agreement (this adult would, presumably have to have good established credit),  OR
    (ii) they provide proof that they are able repay the debt they incur (This most likely excludes the part-time workers).
  3. Pre-screened credit card offers cannot be available to consumers under the age of 21. 
  4. Joint credit card accounts can only have their limits increased with the permission of the adult accountholder.

An End to Visa Kiosks on College Campuses?
Kiosks offering free stuff in exchange for completed credit card applications (by poor jobless college students, of course) will probably cease to exist on  college campuses.  (NOTE: The Visa kiosks offering free blankets at Fenway to cold late-season Red Sox fans are sure to continue . . .)

Promotion for Financial Literacy
The CARD Act also proposes educating the young about the responsible use of credit.  While the plan is still in its formative stages, it will be interesting to see what becomes of it.  Will grade schoolers be forced to take classes in  math, reading, science, geography and Amex  vs. Visa?  Time will tell.

Kara O’Donnell, Esq. is a bankruptcy attorney in Quincy, MA. Call 857-526-1355 for help with your bankruptcy filing.

Kara O’Donnell, Esq.
Quincy, Massachusetts

Posted by Kara O’Donnell

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