Credit card reforms offer protection to college going youngsters. However, there are those who got pre-approved cards during freshmen years of college before this reform came in to being. For these youngsters, it was a license to spend and many maxed out their cards. paying off the balance and hundreds of dollars with fees and charges has been extremely unpleasant for both the students and the parents. Add to it the matter of credit scores and it gets to be a bigger problem.
The federal legislation which turned the credit card industry upside down is the biggest protection for student s in college campuses. Students have enough of a trouble trying to juggle their social lives without having to worry about paying for credit card bills on top of everything else. The new law restricts credit cards from being given to people under the age of 21 unless sanctioned by an adult or if the student can show independent income. It also does not allow companies to offer freebies to unsuspecting students on campus to get them to sign up form credit cards and college groups cannot keep hidden partnerships with card issuers.
This practise of luring in youngsters have been criticised for long as it tends to create a vicious death cycle without realizing the risks behind them. Many of these kids get excited at the opportunity to get spending power and do not realise the implications behind the interest rates and conditions on the cards.
This practise was deemed deceptive and it is one of the biggest changes brought about by the new credit card reform which is forever changing the course of the industry. Banning hikes in interstates and also not letting issuers increase rates due to missed payments on unrelated accounts are also part of the reform. This reform has also focused a lot of its attention to giving protection to youngsters who are unaware of the tactics of credit card companies to grow their business quite relentlessly.
More students use credit cards for reasons which are justified such as building credit history early, buying meals or textbooks and more.
Inappropriately letting students get in to credit card deals which prove extremely expensive has been a trait of the industry which will no longer be encouraged. University branded credit cards and inappropriate marketing techniques are also not being considered.
This move could change the face of the credit card industry with regard to college campuses and underage applicants.