With the implementation of the Obama administration's CARD act due in February of next year, card companies across the U.S. are stepping up efforts to find new cardholders from universities and colleges. Part of the law's provision would prohibit Americans under the age of 21 from owning credit cards. Of course, consumers with ample source of income or have co-signors can still get credit cards. Even so, a large majority of college students are expected to miss out on plastic when the law takes effect.
Financial experts are divided over this particular provision, especially since most financial options require some sort of credit history. Critics say that with many students unable to use credit cards, they can have difficulty buying cars or houses when they finish their studies. At present, a viable credit history is essential for any American to take out loans or refinance their homes. Without credit history, the next generation of young American consumers may have to expect less financial power.
Some experts who oppose the introduction of the provision point out that the law would prohibit responsible cardholders from establishing their own credit history. Many students agree and say that credit cards enable them to develop their financial records and are an important step towards adulthood. Other college students argue that credit cards have become an important part of their lives with more young consumers using plastic to pay for almost everything.
In fact, analysts add that recent studies suggest that students are using credit cards more often compared to several years ago. According to survey conducted by several independent research bodies, college students use plastic to pay for tuition fees, gas, books, and school supplies. Even so, some supporters of the provision argue that the presence of credit cards has only worsened the financial situation of many college students.
They explain that by giving credit cards to financially inexperienced college freshmen, card companies are actually building up a veritable market that they can take control of. Many experts agree that some card firms give out credit cards in hopes of collecting huge profits from debt payments after these younger cardholders find high-paying jobs. Other financial analysts believe that the provision of the CARD Act would pave the way for more responsible card ownership and management. They add that by restricting the ownership of credit cards, Americans will be able to learn how to use plastic in a more responsible manner.