Did you just let your guard down when your child went off to college considering the new rules governing credit cards that came into play this year? Well, it is time you came to reality and understood the truth behind how banks find a way to manipulate the new rules and continue to offer credit cards to children.
Banks have now devised new ways to give children access to credit cards which could either make or break their financial future. While there are a handful of kids who do understand the significance of cards and how to use them wisely, there are innumerable others who do not know how to restrict themselves and lost control when they get this plastic cards in their hands.
There have been reports of many children in their teens wielding credit cards and using them without restraint and thought, thereby landing into credit card debts which are tough to overcome. Most of the colleges are also hand in glove with the credit card lenders since it will help them make a quick buck as well in the process.
Cash strapped colleges are more than willing to let credit card lenders on their campus and reveal some of their interesting promotional offers to students. These banks also get access to critical details of the kids such as their email id and contact numbers from the banks and start hounding the kids with offers even through this media. In addition to getting money for parting with the information related to students, colleges also make money when students sign up for the credit cards being offered. It is important to note that not all colleges resort to this practice.
In an effort to curb this practice, the Congress came up with new rules that clearly mentioned that no banks should be issuing credit cards to children below the age of 21 without a co-signer signing the form. The only exception to this is when the child is able to show enough proof that he/she has a job which will enable them to pay off the dues on their credit cards without resorting to their parents for help.
One of the surveys conducted by the National Endowment of Financial Education revealed that a little over 60 percent of the parents refused to be co-signers for their child`s credit card application while around 16 percent of them were not sure about the path to take. If you are among the people who fall in the second category, ensure you take a good look at the terms and conditions of the credit card application before becoming a co-signer.